Chrysler Screws Dealer!

Discussion in 'Politics, Religion, Social Issues' started by stevento, Jun 3, 2009.

  1. stevento macrumors 6502

    stevento

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    #1
    "The clock is ticking for Ray O'Bryhim: he has less than a week to sell his last 40 cars."

    Here's the long and short of it: He is the owner of one of the 789 dealerships that got a letter from Chrysler LLC stating the fact that they are kicked to the curb. As of June 9. After that it will be illegal for him to sell new Chryslers. And since Chrysler is in bankruptcy, they don't have to take them back. He could move them to other dealers' inventory but he doesn't know what they'll pay for them.
    link
     
  2. quagmire macrumors 603

    quagmire

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    #2
    That is a short deadline, but don't feel all to bad about these dealerships as they have screwed Chrysler( and GM) over a lot too. Dealers have lobbied so much to get laws that make it hard for automakers to get rid of dealerships outside of Chapter 11. Dealers with crap customer service has turned many consumers away from GM and Chrysler due to people thinking the poor dealer experience is directly tied to GM and Chrysler. I agree that is an extremely short deadline to move 40 cars in this economy though and Chrysler should have at least given him until August or so to move those cars.

    Automakers should be allowed to open corporate stores much like AT&T, Verizon, etc can.
     
  3. yg17 macrumors G5

    yg17

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    #3
    Car dealers are about the last thing on my list of things to feel sorry for. Is there a such thing as a car dealer that isn't a sleazy cheater?
     
  4. dukebound85 macrumors P6

    dukebound85

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    #4
    uh good job stereotyping:rolleyes:

    yes, there are honest car dealers...

    yes, i feel sorry for them
     
  5. Ugg macrumors 68000

    Ugg

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    #5
    +1

    Many dealers are slimeballs and I don't have much sympathy for them. I'm sure there are a few low margin dealers that are getting screwed but dealers are a large part of the problem.

    Corporate owned BMW, Volkswagen and Mercedes delivery centers would have a phenomenal impact on auto sales in the US, but they're impossible to create here because the dealers have a deathgrip on new car sales.

    How many new cars rolling off the assembly lines are special orders? Probably very few because the dealers have forced packages onto customers whether they like them or not.

    I don't know what the dealers will be like in the future, but I certainly hope there are a lot more honest ones than there have been.
     
  6. rdowns macrumors Penryn

    rdowns

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    #6
    Regardless of how sleazy some (many?) car dealers are, this is pretty effed up. These dealers were already struggling. The least the government could have done here was make the closing of these dealers a bit fairer.

    Even worse...Saw a story on ABC News that people with pending product liability suits against Chrysler and GM will be lucky to see a dime. Pretty sad when they showed people who were injured for life with huge medical bills.
     
  7. mactastic macrumors 68040

    mactastic

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    #7
    Would it be any different if Chrysler was voiding union contracts rather than dealership contracts? We've had quite a few people come through here arguing that all union contracts should be allowed to be voided, so why not dealership contracts?
     
  8. Demosthenes X macrumors 68000

    Demosthenes X

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    #8
    I don't think anyone is saying that Chrysler doesn't have the right to tear up contracts - they do, and they need to do it. That doesn't make it a nice thing, and there should be some sympathy for the people that are given six weeks notice to find a new way to earn a living. In particular, I wonder why Chrysler couldn't have given more notice, or given a grace period allowing dealers more time to liquidate their inventory once their franchise contract expired...
     
  9. swiftaw macrumors 603

    swiftaw

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    #9
    On the flip side, as a consumer you can probably get a really nice deal if you walk into the dealership just before June 9.
     
  10. takao macrumors 68040

    takao

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    #10
    in the article it states that they were informed on the 14th may and since then they already sold 80 of their vehicles so it's not that short of a deadline

    which means he had in may 120 vehicles sitting in the lot


    for comparison the article also states that on may 14th the terminated 800 dealers had 44.000 cars in their lots which averages out around 55-56 cars per lot .. if you then factor in 27 days it's not impossible to sell that much.. my guess is that the dealer simply had too much piled up with 120 vehicles
     
  11. mactastic macrumors 68040

    mactastic

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    #11
    I got two weeks severance, and zero notice; yet you don't see me complaining about how my former employer should have had more sympathy...
     
  12. leekohler macrumors G5

    leekohler

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    #12
    Six weeks? That's almost unheard of! Most places give no notice when they lay people off.
     
  13. abijnk macrumors 68040

    abijnk

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    #13
    I think its a little different in this case. I'd be willing to bet mactastic didn't have hundreds of thousands of dollars in inventory to clear out or be left holding the bill. They need to do something about the cars that dealers are stuck with, even if that is just allowing them to sell the cars as long as it takes to clear them out.
     
  14. Sdashiki macrumors 68040

    Sdashiki

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    #14
    An automobile IS STILL worth a lot of money.

    Yup, you're screwed Mr Dealer because you wont get "full value" for it...but since you more than likely were holding the inventory on spec/hold for the manufacturer, you wont actually lose money, but probably break even.

    Im not saying its a good thing this is happening, but its not as bad as people make it out to be.

    Not as if these cars magically cant be driven anymore, or dont work, or arent brand new with the smell.
     
  15. bobfitz14 macrumors 65816

    bobfitz14

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    #15
    +1 to you dukebound, there was a dealership owner on the radio the other day and (since it was really early i forget what he specifically said) he clearly wasn't a bad person or anything, though upset about the fact that his business was going under he was still pretty calm. i DO feel sorry for most.
     
  16. FX120 macrumors 65816

    FX120

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    #16
    But the problem isn't that they're just out of a job, it's that they now have (typically) several million dollars invested in inventory which becomes impossible to sell after their contract expires.

    They'll have a really hard time selling their stock when competing dealers have factory incentives and rebates and can offer a lower price...
     
  17. mactastic macrumors 68040

    mactastic

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    #17
    I had significant financial arrangements to deal with; however, like I said, I got ZERO notice for my financial arrangements. They got six weeks for their larger financial arrangements.

    None of this is fair. Life isn't fair. Six weeks may be a rather compressed time frame to move their inventory, but zero time is also a rather compressed time frame for me to do what I needed to do.
     
  18. mactastic macrumors 68040

    mactastic

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    #18
    And what of those who got zero notice of a job loss, and had several hundred thousands of dollars invested in a house that they now are forced to sell at a significant loss or face foreclosure? Same boat, different scale.

    Again, six weeks may be a tight time frame, but there are certain risks you take as a business owner -- or homeowner for that matter. Is it fair? Nope. Do businesses have an obligation to act in a manner perceived to be "fair" by their employees or franchisees? Nope.

    Homeowners across the nation who've lost jobs are facing this same problem. If car dealers deserve (meaning someone -- likely government -- stepping in) help, why doesn't everyone else facing financial distress deserve help too?
     
  19. Rodimus Prime macrumors G4

    Rodimus Prime

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    #19
    I am with Mactastic. When i was laid off I got ZERO warning, no severance no nothing. All I got was my 14 days of vacation for the year.

    I have my own finance to deal with and I had no time to make sure they were all in line. I was lucky I had a rather large savings built up so I did not have that panic.

    As for anger at my former company I worked for. I am angery they lied to all their employees telling us how great everything was, how they had all these projects line up in the next year and would be going great. The company also talks how honesty and integrity is so important. Then they turn around and do a mass round of lay offs. The pretty much to me shoots any integrity the company had left in the foot.

    It was known long before hand Chrysler would be doing this and most of the dealership who got it knew they where on the copping block.
     
  20. takao macrumors 68040

    takao

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    #20
    also it has to be considered that chrysler was close to bankruptcy already last year .. if i were a dealer i sure wouldn't let stock get out of hand .. also chrysler field bankruptcy in april so even then a dealer might be interested to reduce stock

    also let's be realistic here .. those dealers sorted out are most likely those performing the worst over the last years or those too close to other dealers ... something which shouldn't be forgotten
     
  21. danny_w macrumors 601

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    Austin, TX
    #21
    BIG difference. Union contracts cost the company money in the form of wages and benefits, but the dealer doesn't cost the company a single solitary dime. I was watching live MSNBC video yesterday when the Chrysler CEO stated that canning the dealers was not a "money" thing. When the senators asked him why they were canning the dealers if it was not a "money" thing, MSNBC (or somebody) pulled the video feed. And now I can't find the video anywhere on their site.
     
  22. quagmire macrumors 603

    quagmire

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    Apr 19, 2004
    #22
    It is a customer satisfaction and inventory thing. They are right it is not much for a money thing. It is to reduce the dealers of competing against each other rather then competing against the competition. It is also to get rid of bad dealers who don't treat the customers right because it poorly reflects against Chrysler. If dealers can not sell the vehicles on the lot and have a big supply, it also means Chrysler can not run their factories at 100% capacity and lose productivity because of old inventory is still sitting on the lots.
     
  23. Demosthenes X macrumors 68000

    Demosthenes X

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    #23
    Pulling a dealer franchise is not the same thing as laying off an employee. Most employees don't have hundreds of thousands of dollars worth of company inventory to sell off before it becomes illegal for them to do so. It's not the same thing.

    Anyone who is laid off - or has their business pulled out from under them - deserves some sympathy. I'm not sure why that's so hard to extend...

    Do you have any idea how the dealer franchise system works? The dealer owns every one of those cars. They are not "holding" them for the manufacturer, they bought them at a given value. So when they sell them below cost, you better believe they're loosing money. And under the terms of the franchise agreement, it becomes illegal to sell them once that contract expires. That means, whether or not they have "new car smell", the dealer can't sell them once the contract is up.

    So yeah, it is as bad as people say. The only reason you would think otherwise is because you're grossly misinformed as to how the system works.
     
  24. danny_w macrumors 601

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    #24
    Exactly, the dealer owns each and every car on his lot, he is not "holding" them for anybody. That is called floorplan financing, and means that the cars are financed by the dealer until the car is sold at retail. My father had a Chrysler dealership in the 70's and we did our floorplan through the local bank; they were glad for the business, much cheaper than Chrysler floorplanning, and much easier to work with.
     
  25. mactastic macrumors 68040

    mactastic

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    #25
    Then why close the dealers if they don't cost anything? :confused:
     

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