Kim,

It absolutely makes sense now. Wow I guess I missed dealer slang in Engineering school but now it makes sense. You impress me more every day; now I find out you are bi-lingual

Just kidding, thank you very much for the explanation. What about the dealer you are with now? Is your job safe (well as safe as safe is these days)?


Stay safe...


Respectfully,


Paul (MisterTaz)

 

Here goes Media Critic again. Only chimes in when the name nobama shows up on a post. When there is talk about cars he is nowhere to be found.


Media... face the facts. You voted in the next Jimmy Carter... but worse than carter. Clinton and carter are both looking pretty darn good right now!

 

It was more like street talk in the back alley

 

I actually left my Dodge dealership in Jan 2008 to go work for a sub-prime lender. We are actually one of the only lenders that has grown thru these tough times - mostly because we didn't do home loans. We also didn't get crazy when things looked good. We buy our loans with the same standards today that we had 5 & 10 years ago.

My job seems to be very stable except for the fact that I know about 100 out of work dealership people who want it. The truth is that the car business isn't any fun anymore. It used to be like getting paid for going to college. The industry has changed & was changing before the economy crapped out. I miss the old days!

 

Actually, I'm compelled to chime in when something really dumb is said (your posts in particular keep me busy).

 

For everyone affected, dealers & customers, it's always a sad day when economics drive decisions that end up adversely impacting all. Dealers lose their franchise rights and customers lose local technical support. Around here dealerships have been consolidating for some time. Chrysler closed a local CJ dealer and gave the franchise to the DT dealer down the road. Now we have a full range CDJ dealership (good thing). And a vacant, ugly building & grounds up the street on a well travelled "motor mile" (bad thing).

From what I could see glancing over the list, Chrysler is doing more of the same. Many of the dealerships sold only one line of the product range. Many of the dealers going forward will handle all product lines, so some of us may not be as bad off as we might think. And besides, Detroit needs to reduce/consolidate its dealership network to become more efficient at selling cars. Many of these pending closures sell less than 500 cars a month. I think I read somewhere that the Japanses (i.e., Toyota & Honda) typically average 1000+ per month. Bottom line, it's a dog-eat-dog world. Either produce or be out of business.

Now for some of us, there may be some really good buys out there from dealers on the list. I've been talking to one midwest dealer (that is on the list) about a Crossfire listed in his inventory. Asking price was reasonable, but now it might be even better. Especially if he has a deadline to remain open and wants to unload the car before bankruptcy proceedings shut him down & send the cars to other dealers for sale. And this can happen real quick.

We had a local Chevy dealer here close unannounced one Saturday. GM walked in on Saturday AM and said shut the doors (GM was the majority owner, like KimPossible said earler). The entire inventory was shipped elsewhere in a matter of a few weeks. New cars went to other dealers; used cars went to auction.

 

Well, it was announced today that our local Chrysler and Dodge dealers are being closed. Both dealers have other lines they sell so are staying open and anticipate no employee reductions and will continue to service Chrysler products. The Dodge dealer made an interesting observation, he also sells Hondas and Hyunais off the same lot and has been pressured for years by Chrysler to separate his car lines but has refused to do so. In his opinion that was the determining factor for losing his Dodge franchise. The Chrysler dealer has a similar setup with other car lines on the same lot.

Both of these dealers serve a community of nearly 200,000 people, but in the next county over that has a population of only 50,000 the Chrysler dealer gets to keep his franchise. What's the difference? He has his car lines separated on different lots. Seems Chrysler is playing politics and we will be the losers. Of course they are assuming customers will just drive the extra distance to purchase their vehicles and for servicing. Not a very safe assumption.

 

I wish we sold those kind of numbers. I have worked in dealerships from Los Angeles to Orlando with many large cities in between - very few stores sell those numbers. The top 10 Honda stores in the country sold 800-1200/mo during the boom times. That's not 10% - that's top 10. You will see some domestic stores that put up big numbers, but those are typically the stores with big fleet contracts.

My VPA (number of new cars required to sell) at my Chrysler store was 50. That is all we were required to sell. In our entire region which included Orlando, Tampa, Gainesville and Jacksonville as well as all the small towns around there - the highest VPA was like 140 and that was for a store that sold 600/mo & was "killing it".

Our four Honda stores in Orlando sold an average of 175 cars last month - new & used. The best one sold 250 & the worst was 130. I have a Kia store that sold 6 cars in March - new & used. Yeah - when you can count cars sold on your fingers it's a BIG problem.

Dealerships don't make any money selling new cars & haven't in many years. That's why we have a saying in the car biz, "switch & get rich" - meaning switch people to a used car. Sales people will sometimes get "spins" (money from the manufacturer) for selling new cars, but mostly new cars feed the beast that is fixed operations. Fixed operations (service drive, parts, etc) are what pays for a dealership to stay open - not car sales. I wish people would understand that it costs a dealership about $1700 per car to sell that vehicle.

I guess I get on my soap box because this is all I do all day. As a dealership rep I work with about 80 dealers on a daily basis and have a better view of the "big picture" ... very bad times.

 

I don't really have any issue with a manufacturer stipulating that to have a franchise requires a unique facility - separation of product lines. While I haven't really given this much thought before, a quick drive down our "motor mile" this morning on the way to work showed me that this is the case for nearly every foreign (European or Japanese) marque. Each one of these had a distinct showroon and/or facility.

While it might not be fair, it certainly is within the right of the manufacturer to insist that this is a condition for renewing the franchise. But I'm also convinced that this probably imacted less than 50% of the dealers on the list. I still think the primary driver was sales, market potential & the current economic times.

 

So do I, did you hear that Pontiac is also cutting back on dealerships?

 

I do believe GM is completely discontinuing Pontiac. Thus, all Pontiac dealerships will be gone or converted to something else.

 

did you guys notice that Wyckoff Chrylser is on the list? They had one of the best online parts departments around. Low prices, good service. Sad to see them go. We have a Dodge dealer here in Rockville. They announced this morning that they will continue in business as a used car dealer, they were selling more used cars than new Dodges and this is a good sized dealer on Rockville Pike, one of the busiest streets in America for retail. More used cars than new cars, pretty amazing.

 

Look a couple of things here, yes the administration is behind this, a political discussion, can continue elsewhere.

As per Kim, car dealer loose money selling new cars, but they also pay to have that privilege, so why is the parent company dropping them? This makes no sence.

Also in the example that Kim gave earlier, wouldn't it make more sence to get rid of the dealer with the huge debt load (new building) and write off the building (they are going to do that anyway!)

This whole thing makes very little sence to me.

And yes, I blame Obama!

 

How do you blame Obama for Chrysler's bad management?

 

my local dealer is gone as well. this really sucks. just sad to actually see it happen.

 

Blame consumers. This has been coming since the late '90's. We see this with our cars every day. What devalues a vehicle .... over production, high rebates & low interest rates. Why would you pay 80% of sticker for a 1 year old vehicle when the factory offers rebates that are 30% off sticker. Now your 1 year old car has to be valued that much less & we complain about resale values.

Everyone wants a GREAT DEAL on their car and then complain about the resale (by everyone I don't be us on the forum, I mean us on the planet Earth). The parallel is the same with discounted financing on new cars. You are going to pay 8 points higher (at least) typically on a used car so now the value has to go down on the used vehicle to make the payments competitive. Combine rebates, lowered rates and over production - that is the trifecta of doom for the auto industry.

I can't even complain ... I feel partly personally responsible for Bayview finance going out of business. God knows how many people I have put in 96 month loans, but all they cared about was the payment. How much car can I get for $400/mo - I don't care how you do it. I wish I had a dime for everytime I have heard that.

Now add on the fact that people trade their vehicles typically every 36-42 months with no money down and rolling negative equity. It had to break sometime.

Keeping up with the Jones' has broken quite a few people.

 

Not to jack the thread because it has been one of the most interesting, especially the inside view from Kim, but here's the bare truth.

The bankruptcy of Chrysler and soon GM was inevitable. That was clear six/eight months ago. The White house should have stayed out of it, last year and this. But.............

Obama forced the bankruptcy, and to a program of his design. That puts his name on it, what ever happens.

Maybe it comes out well in the end. If it does, any critics who don't reverse their opinion are stubborn pin heads.

If it comes out bad, any libs that don't accept fault are stupid pinheads. And that would include President Obama.


roadster with a stick

 

But they were heading for bankruptcy anyway. That's not his doing. If they'd made great cars all along they'd be able to weather the recession. It's flatly absurd to blame the president for the mismanagement of Chrysler (or GM for that matter). Strong companies that make the best cars for the money don't go bankrupt.

 

Your argument is tangental. President Obama forced the bankruptcy and designed the terms. That makes the outcome his responsibility. Not saying good or bad at this point just making sure the label sticks.

Now, if you want to debate this, fine. But let's be polite and start a new thread and stop jacking this one.

As to strong companies, these three, Ford, GM and Chrysler weathered the great depression and came back to build warmachines that defeated the Axis of evil in WWII. They were strong Companies that made it thru the Carter years, with a little help from Uncle Sam. After 9/11 I seem to recall them sending new vehicles to NYC police and fire depts. Not one Nissan, Honda, Toyota, or MB (who had just raped Chrysler for $9billion bucks).

Our government could have done better by these industrial stalwarts. But a crisis is handy when you are usurping power. What better time to kill Capitalism than when it is in a down cycle?


roadster with a stick

 

Ironically, probably the only thing that kept Ford out of the mix was the plain white Crown Vic with painted steel rims.

Great fodder for the Black Suburban Conspiracy Theorists, don't you think?