This past week both GM and Chrysler announced the closing of dealerships throughout the U.S. Some of the closings were in to response to what the companies felt were under performing dealerships. Dealerships that GM and Chrysler felt were not selling enough cars and service. Some of these dealerships have been in business for decades. One GM dealership in Cleveland, Ohio has been selling Chevrolet’s for 98 years.
But there is more to this than just closing dealerships to benefit GM and Chrysler’s bottom line. These dealerships are part of the local communities and provide jobs to car salesman, financing employees, used car sales people and mechanics. But what is even more important is how these dealerships also sponsor local events, charitable contributions, little league teams and much more.
In an article at The Macomb Dialy it also states that:
Both GM and Chrysler are scrambling to reorganize and stay alive in a severe recession that has pummeled car and truck sales for U.S. automakers, which had already been losing market share to foreign companies for decades.
Chrysler LLC is already in bankruptcy protection, and industry analysts say General Motors Corp. is making its cuts now in preparation for a bankruptcy filing June 1. The company says it would prefer to restructure out of court.
GM declined to reveal which dealers will be eliminated. Many dealers vowed to fight, first through a 30-day company appeal process, then possibly in court.
GM’s dealers are protected by state franchise laws, and the company concedes it would be easier to cut them if it were operating under federal bankruptcy protection. GM says it’s trying to restructure outside of bankruptcy because of the stigma of Chapter 11.
This one line says it all:
“which had already been losing market share to foreign companies for decades.”
So who’s fault is this? The dealerships or GM and Chrysler? Those fat cats in Detroit made decisions that caused the mess. Now they are trying to pass on their incompetence onto the local dealers who had no say in the decision making process.
Wasn’t it the purpose of the bailout monies given to GM and Chrysler was the hope that keeping these car makers afloat would save jobs?
What do you think? Should these dealers be allowed to stay in business and control their own destiny separate from what Detroit thinks is right?