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HomeOff Topics News & Politics › Senate reviews closing of GM, Chrysler dealerships
06-04-2009 10:31 PM  9 years agoPost 21
Stet

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Key Largo FL

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All contracts are void, except unions get special consideration, and an illegal cut in line in front of creditors. This will be in the courts for years.

Should have let them go bankrupt from the start. The government did not bail out the airlines after 911. My friends lost their pensions.

keepin' it real

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06-05-2009 03:32 AM  9 years agoPost 22
RonHill

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FLL, FL

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1stPlace
If you hadn't thrown insults at SSN Pru, I wouldn't have scolded you like a child.
You acted like a child when you threw insults aimed at a person, I compared peoples actions. You attacked the person since you were upset and didn't agree with me... Don't confuse the actions here.
Now they are getting paid again by GM's bailout and bankruptcy, while the little guys, the dealerships and shareholders loose everything they invested into the company.
The owner of a dealership is not exactly a "little guy". They are a business owner who took a chance on a business plan. That means they get to take the profits AND the risk, not just take the profits and be protected from the risk at taxpayer expense.
Then, dissolve the franchise. That would have bought dealerships the time to partner with different manufacturers, retain cash flow, and remain open for business.
Or, actually let the free market decide. Franchises that were profitable would stay in business, and those that were not would close.... Just as it SHOULD happen.

SSN Pru
Let me ask you this, had a private investor lent the money to GM, would you still be against compensating the dealerships?
No. Then it would be a case of the willing investor taking a chance. As it stands it is your money and mine going to guys that quite frankly are not "little fish".
Also, you are acting as if the Government SOLELY owns GM.
60% US Gov ownership and 12.5% Canadian Gov as of last count.... that is a majority ownership (72.5%). I found this to speak volumes:
http://news.yahoo.com/s/ap/20090601/ap_on_bi_ge/us_automakers

The plan is for the federal government to take a 60 percent ownership stake in the new GM. The Canadian government would take 12.5 percent, with the United Auto Workers getting a 17.5 percent share and unsecured bondholders receiving 10 percent. Existing GM shareholders are expected to be wiped out.
The US Government does not so it would be hard for you to argue that the dealerships would be bailed out by tax payer money.
The US Gov owes 60%, Canada 12.5 and current investors will lose everything.... How is that not government owned again?

Existing GM shareholders are expected to be wiped out

Stet
Should have let them go bankrupt from the start.
Agreed.
The government did not bail out the airlines after 911.
That is not true.
http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=24684

Last Friday, the House and Senate passed the airline industry bailout bill, authorizing $5 billion in cash and $10 billion in loan guarantees, and President George W. Bush signed it into law on Saturday.

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06-05-2009 04:12 AM  9 years agoPost 23
GyroFreak

rrProfessor

Orlando Florida ...28N 81W

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These dealerships purchase their inventories from the manufacturers, and then sell the cars. The manufacturer gets paid when they order the cars, not when they sell them. I fail to see how closing dealerships will save them money. Especially considering that the manufacturer financed a lot of those vehicles and is accepting payments on them from the dealerships.
I have read this thread but still don't see why closing dealers (or canceling the franchise) is saving money, or rather how the gov thinks it will save money.

I think about the hereafter. I go somewhere to get something, then wonder what I'm here after ?

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06-05-2009 05:16 AM  9 years agoPost 24
drdot

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So. California, Orange County.

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fwiw...

..Seems some or many of the dealerships to be closed are actually profitable.....Reducing the distribution chain for the upcoming Obamamobiles seems a poor business decision....

BC

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06-05-2009 11:59 AM  9 years agoPost 25
1stPlace

rrApprentice

Ohio USA

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Then, dissolve the franchise. That would have bought dealerships the time to partner with different manufacturers, retain cash flow, and remain open for business.
Or, actually let the free market decide. Franchises that were profitable would stay in business, and those that were not would close.... Just as it SHOULD happen.
Except, hundreds of profitable dealerships are being closed.

Diejenigen, die nicht lernen aus den Fehlern der Vergangenheit bestimmt sind, zu wiederholen.

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06-05-2009 12:21 PM  9 years agoPost 26
SSN Pru

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Taxachusetts

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That means they get to take the profits AND the risk, not just take the profits and be protected from the risk at taxpayer expense.
You honestly believe that the 'business risk', ie, the selling of cars, is the same as their 'franchise risk', ie, the risk of having their franchise taken away?

You are combining two risks together where they shouldn't be. I know damn well that if I were to buy a franchise I sure as hell woudln't have a clause in the contract saying that my franchise could be taken away from me because of another's F Up.

Gyrofreak,

I agree, I can't find a good reason for closing them down. I don't think it will overall save any money unless GM has, in it's franchising contracts, a requirement to provide a quota of cars to the franchised dealerships...

That would prohibit them from decreasing production and put an unacceptable amount of inventory on the lots, which is what is going on right now.

Stupidity can be cured. Ignorance is for life!

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06-05-2009 02:07 PM  9 years agoPost 27
GyroFreak

rrProfessor

Orlando Florida ...28N 81W

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Thanks SSN.

I sure closing of dealers has put in the minds of potential customers,
"Bankrupt ? I'm not buying a car from someone who is going out of business !'
I wonder how may pepole this will cause to be layed off, any body know any numbers ?

I think about the hereafter. I go somewhere to get something, then wonder what I'm here after ?

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06-05-2009 02:09 PM  9 years agoPost 28
SSN Pru

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Taxachusetts

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That would be my feeling as well, although, I was considering buying a new car and not from GM, Chrysler or Ford.

Stupidity can be cured. Ignorance is for life!

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06-05-2009 03:05 PM  9 years agoPost 29
RonHill

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FLL, FL

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SSN Pru
You honestly believe that the 'business risk', ie, the selling of cars, is the same as their 'franchise risk', ie, the risk of having their franchise taken away?
Deciding to join as a franchise *IS* a business risk. How you can pretend that fact away is amazing.
You are combining two risks together where they shouldn't be.
You are separating the two since that is the only way your argument works. Regrettably, that is not how it works. You decide to start a business, and you decide to join a franchise. Both are business choices YOU made. You should earn the reward, or face the pain of making those choices without a free ride to my checkbook if you fail for whatever reason.

When you own a business you are responsible no matter what the outside influences are... Even if you have zero control. Lets take 1st place and his aviation business as an example. His work is dropping... Is that his fault? Of course not!!! But the fact that his work is drying up is a risk of having a business... And the fact it is not his fault does not mean that you should give him your ATM pin number or worse, give him MY ATM and pin number.

Does it mean that the dealers did anything wrong? Nope. But they made business choices and one of those choices was to hitch up to a dealer network. It brought many benefits, and it has drawbacks.

Now most have said that closing dealers really don't do anything to help the auto makers... And they are right.

Closing dealers is an arm waving move designed to make it look like they are doing something.

The funny thing is how Obama's team has recommended actions that will cause people who did nothing wrong to lose jobs... While protecting the Unions who helped add to the problem. Also, the selling of Hummer to China is not exactly going to help the trade deficit.

So the people who bought into Obama saving US jobs.... Well, they have egg on their faces.

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06-05-2009 03:11 PM  9 years agoPost 30
GyroFreak

rrProfessor

Orlando Florida ...28N 81W

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cause people who did nothing wrong to lose jobs.
Anybody have estimated numbers ???

I think about the hereafter. I go somewhere to get something, then wonder what I'm here after ?

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06-05-2009 03:45 PM  9 years agoPost 31
RonHill

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FLL, FL

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GyroFreak
Anybody have estimated numbers ???
Numbers are all over the place.
http://ts-si.org/workplace/9547-tracking-recession-closing-car-dealers-add-to-state-budget-woes.html

It’s expected to put about 100,000 people out of work nationwide.

Dealers often are keystones of their communities, “with some of the better jobs available,” said Paul Taylor, chief economist of the National Automobile Dealers Association in Virginia. A single dealership employs up to 100 people and averages $16.5 million a year in state and local taxes, advertising expenditures and charitable contributions. Dealers collect taxes on auto sales, parts and repairs. Their employees pay state income taxes in most states. Car-buyers pay titling fees and in some states, a personal property tax.
http://www.thebigmoney.com/blogs/shifting-gears/2009/05/15/car-dealer-closings-don-t-mean-massive-job-losses

We have a new number to confront in the ongoing meltdown of the Detroit auto industry: 187,000. That’s the number of jobs that the National Automobile Dealers Association estimates will be lost as Chrysler and General Motors (GM) downsize their dealer networks.

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06-05-2009 04:48 PM  9 years agoPost 32
GyroFreak

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Orlando Florida ...28N 81W

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Thats a lot of people out of a job.
Well, Brian Deese, who once slept in the parking lot of a car manufacturer is the new GM disassembler. This will be Obama's bag boy. If he fails (which he will) it's Deese's fault, If he succeeds, Obama will take the credit.

I think about the hereafter. I go somewhere to get something, then wonder what I'm here after ?

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