Posted on 04/28/2009 12:46:15 PM PDT by Zakeet
General Motors Corp. told its dealers Tuesday that it will force 1,000 to 1,200 underperforming locations to close their doors as the automaker tries to thin dealer ranks to make the remaining outlets more profitable.
GM told the dealers about the plan in a video conference, according to a dealer who spoke on condition of anonymity because the video conference was private. It is part of the company's plan announced Monday to cut more than 2,600 dealers by 2010.
The company expects to lose 500 Hummer and Saturn dealers when those brands close or are sold, and it expects 400 dealers to close voluntarily. Another 500 would be consolidated into other dealerships, according to the dealer.
GM said Monday that it also would eliminate its Pontiac brand, but there are only 27 dealers that sell just Pontiacs, according to the National Automobile Dealers Association. Most Pontiac dealers also sell Buick and GMC vehicles at the same location.
(Excerpt) Read more at news.yahoo.com ...
B4 the “crisis”
GM was selling fewer cars than Toyota, with 3 times as many dealerships.
I’m not disputing what GM is saying about the closings, but my understanding is that unless it is actually handled through a bankruptcy court process, the GM-dealership contracts are enforceable under the laws of the states, where those laws were designed to protect the dealers; and without the judiciary stepping in via an actual bankruptcy, the dealers have usually found favor in the state courts - which is why GM has been unable to close the excess dealers all these years.
Messaging from the late Great State of Michigan, a union state. Who in there right mind would even consider buying a GM vehicle after this debacle is sealed???
What are they going to do with all this inventory from the closed and consoidated dealerships. Who is going to buy a vehicle who’s warranty is backed by the US Government??
The above to a lesser extent goes for Chrysler, only because I would consider buy a Dodge truck if it was cheap enough even without a warranty.
What say you??
Ship’um off to Dave’s Farm (look it up on youtube, total fun + ! )
Because a $18,000 car and a $1 bottle of soda are the same economically, right?
LOL
Thanks.
Yes, certainly something along those lines has already begun; from April 9 of this year:
THE WHITE HOUSE Office of the Press Secretary
FOR IMMEDIATE RELEASE April 9, 2009President Obama Announces Accelerated Purchase of 17,600 New American Vehicles for Government Fleet
WASHINGTON – Today, President Barack Obama announced that the General Services Administration (GSA) will accelerate its purchase of new cars for the government fleet by investing funds from the American Recovery and Reinvestment Act to buy about 17,600 new, fuel efficient vehicles produced by American auto companies by June 1, 2009.
...
That's from the White House website: http://www.whitehouse.gov/the_press_office/President-Obama-Announces-Accelerated-Purchase-of-17600-New-American-Vehicles-for-Government-Fleet/.
".....to watch them loot the company more quickly", you mean.
It is a franchise, but more is not necessarily better. This allows GM to purge its underperforming dealers so as to concentrate its efforts--and money--on those dealers that are performing better. It costs a lot of money for a franchisor to monitor and provide support to a franchisee, and this lessens that.
If GM was moving the same number of units as Coca Cola they wouldn’t be in this mess. You can over penetrate markets, Krispy Kreme and Starbucks both recently proved that.
Too bad, another event putting people out of work.
They will never remember who did this to them when the time comes to vote though.
Don’t know about Saturn’s profitability but aren’t they non-union? That is the end of that experiment. Note the ownership of GM now ...government and union.
People matter, GM and unions do not. After decades of being a loyal GM buyer I will never buy another one ...the end of GM for me.
Not sure what I’ll buy in the future but it will not be GM. Thinking about Subaru for a commuter, Ford for truck if the Dodge ever wears out and something the wife wants for her but not GM.
I know that bashing the union is very popular on these auto discussions, but I fail to grasp the logic. GM was and is owned by the stockholders who select the board of directors who select the CEO who selects a management team. These are the people who run the company and if it goes into bankruptcy, they will be the people responsible.
I am not a real fan of unions but I have to acknowledge that the union leadership has done a better job of building wealth for their membership than the board of directors and company management has done in building wealth for the stockholders.
Blaming the union for bad management decisions or for obtaining contracts favorable to union membership is just like blaming a customer for negotiating a lower price when they purchase a car. Possibly in this upside down world, we customers as well as the workers should all forgo the opportunity to make the best deal possible for ourselves so that we can protect those investors who fail to properly oversee the board of directors who fail to properly oversee the management who fail to make the wise and prudent decisions (including labor negotiations) necessary for the company to prosper.
Oh, yes... GM will be ‘encouraged’ to build eco-econoboxes. I don’t mind fuel efficiency nor being environmentally friendly, but there is a limit to what I’ll put up with.
Not a good example.
You usually don't have to take out a loan for a Coke, Kryspy or a Starbucks. And the purveyors of said brands don't need acres and acres of land to stock the product. Nor does their inventory require million$ to procure.
I didn’t bring up Coke, I was replying to that. And I brought in KK and SB just as proof that GM is by no means the only company to find that they’ve over saturated, anybody can wind up with too many sellers to feed the buyer stream.
Yea, I get that now. I has a split focus when reading and replying. Normally I can FReep and chew gum at the same time. But FReeping and eating, and fending off the critter wanting a bite of my chow...
“Blaming the union for bad management decisions or for obtaining contracts favorable to union membership is just like blaming a customer for negotiating a lower price when they purchase a car.”
That is a poor analogy. Imagine if you went to buy a car, and the dealer says “Until you buy a new car from us, we are going to keep your old car”. Sound like a fair negotiation, or does it sound like extortion? Unless you meet union demands, they keep you from doing business. That gives you 2 choices, bankruptcy now or bankruptcy later. They chose later is now it is here, the parasites are about to kill their hosts.
Its the same story in cities and states thoughout the country. They are all going bankrupt because of union labor costs. In states like NY which have HUGE numbers of state workers, politicians know that if they cross the union they will targeted for defeat. Instead they give in to union demands for more money and benefits for less work (that is ALWAYS the union demand). It works well until the tax money runs out.
Wherever you have big unions you have failure and bankruptcy.
I realize there is a problem making an argument by analogy and I should not have engaged in that tactic.
My basic point is that there is an over emphasis on unions being the cause of the demise of General Motors. The hourly work force of GM was unionized when the company had over fifty percent of the market and was making huge profits. It was not union contracts or workers who made the bad decisions on design, product mix, resource allocation and other issues leading to loss of customer loyalty and financial stability.
When the company was flush, everybody was happy and almost no one was holding management to account. Product mix was allowed to go stale, quality was allowed to deteriorate and resources were diverted from the core business to unrelated ventures. Instead of exercising foresight and making decisions for the long term good of the company, management took the short term approach. They bought stockholder support with dividends, made the board of directors an extension of management, and bought labor stability with ever increasing benefits.
When Ross Perot was kicked off the board for warning of the problems now occurring, he was bought off for a billion dollars when a billion was a lot of money. The Japanese moved in with a long term approach, offered quality products that people wanted to own, and built them in right to work states with a compliant work force. GM failed to recognize the threat and continued to operate as if there would be no tomorrow.
Now it is all the fault of the unions. I am sorry but I still fail to see the logic in that argument.
Does anyone else make a vehicle equivalent to the suburban? It seats 8/9 AND has a generous amount of cargo volume on top of that.
Is the Excursion still made?
Interesting, article in our local paper says the Chevy dealer is buying the Honda and Ford dealers. I guess he intends to stay in business.
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