Skip to comments.GM to force more than 1,000 dealers to close (immediately -- and 1,600 more by 2010)
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 ...
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.
Someone tell me if I am wrong. The outcome of this is that between the Government and the Unions they own 89% of GM.
The Bond Holders get 10%.
Under a Chapter 11 Bankruptcy Bondholders have precedent over all assets.
Who owns the Bonds. Probably Pension Funds and individual investors. Investors Getting screwed?
This would help the auto industry from the bottom up. Maybe these dealers would have been able to stay open. It wouldn't just pour money into the health care fund. AND, MOST IMPORTANTLY, THE TAXPAYER WOULD HAVE A NEW CAR!
Instead, they offered to let us deduct the sales tax on next year's tax return. Oh, goody!
Women and minorities, ah, yes. And just how many “minority” owned dealerships will be cut? And if they are allowed to survive, guess whose market share they will pick up? Non minority dealers? Perhaps giving back wealth to “its rightful owners”? I may be wrong, but it wouldn’t surprise me.
I'm sure this is not a problem. All these unemployed dealership employees need to do is step right into those shovel ready high paying Green jobs.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.