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How will dealers 'dodge' teh ax?
Chrysler aims to close 789 dealerships
Move could cost cities around the country jobs and tax revenue The Associated Press NEW YORK - Chrysler LLC wants to eliminate roughly a quarter of its 3,200 U.S. dealerships by early next month, saying in a bankruptcy court filing Thursday that the network is antiquated and has too many stores competing with each other. The company, in a motion filed with the U.S. Bankruptcy Court in New York, said it wants to eliminate 789 dealerships by June 9. Many of the dealers' sales are too low, the automaker said. Just over 50 percent of dealers account for about 90 percent of the company's U.S. sales, the motion said. Dealers were told Thursday morning through United Parcel Service letters if they would remain or be eliminated. The move, which the dealers can appeal, is likely to cause devastating effects in cities and towns across the country as thousands of jobs are lost and taxes are not paid. Chrysler spokeswoman Kathy Graham would not comment other than to say the company will notify dealers before speaking publicly. A hearing is scheduled for June 3 in U.S. Bankruptcy Court in New York to determine whether to approve Chrysler's motion. Judges often rely on companies in bankruptcy to help determine what is in their best business interest, such as the closure of dealerships or cancellation of contracts. Don Burk, co-owner of Heritage Chrysler Jeep in Ozark, Mo., said he found out that Chrysler plans to get rid of his dealership when he opened his UPS letter Thursday morning. "Right now I'm processing the information," he said shortly after reading the letter. "I'm sure I'm going to get with my partner and we'll decide what to do from here." The dealership, in a city of about 10,000 near Springfield, Mo., is involved in the community, sponsoring sports teams and even buying championship rings for the Ozark High School girls basketball team when it won the state championship several years ago, Burk said. "If you're a good-sized business, kind of by default you're involved a lot," he said. Chrysler dealerships aren't the only ones scheduled to get bad news this week. General Motors Corp. says it is notifying 1,100 dealers that it will not renew their franchise agreements when they expire at the end of September of 2010. In its motion, Chrysler said it has many dealerships that sell one or two of its brands, with Chrysler-Jeep dealerships competing against Dodge dealers as well as other automakers' stores across the country. "In addition, as suburbs grew and the modern interstate system continued to evolve, longstanding dealerships no longer were in the best or growing locations," the company said in its filing. "Many rural locations also served a diminishing population of potential consumers. Some dealership facilities became outdated. Other locations faced declining traffic count and declining populations." Chrysler said in its filing that dealers are not competitive enough with foreign brands. Chrysler sold an average of 303 vehicles per dealer in 2008, according to its filing. By contrast, Honda Motor Co. sold about 1,200 vehicles per dealer, while Toyota Motor Corp. sold nearly 1,300 per dealer. Chrysler said its dealer network "needs to be reduced and reconfigured in a targeted manner to strengthen the network and dealer profitability and to achieve optimal results for the dealers and consumers." Chrysler has received $4 billion in federal loans and has been operating in bankruptcy protection since April 30. Its sales this year are down 46 percent compared with the first four months of last year and it reported a $16.8 billion net loss for 2008. General Motors has a June 1 government-imposed deadline to come up with a viable restructuring plan or join Chrysler in Chapter 11 bankruptcy protection. Dealers around the country are gearing up for a battle against the two automakers, but it's not clear how much power they'll have to save themselves. Legal battles with the dealers could delay Chrysler’s exit from a government-forced bankruptcy within the time frame of 30 and 60 days projected by the Obama administration. Some Chrysler dealers who fear they will lose their franchises have formed a committee and hired lawyers. In conjunction with the National Automobile Dealers Association, a trade group, the committee has asked Chrysler dealers to contribute $4,000 each to a legal fund, according to news reports. |
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How will dealers 'dodge' teh ax?
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How will dealers 'dodge' teh ax?
"'Teh' Fortisque Flatiron" > wrote in message ... Chrysler aims to close 789 dealerships Move could cost cities around the country jobs and tax revenue The Associated Press NEW YORK - Chrysler LLC wants to eliminate roughly a quarter of its 3,200 U.S. dealerships by early next month, saying in a bankruptcy court filing Thursday that the network is antiquated and has too many stores competing with each other. The company, in a motion filed with the U.S. Bankruptcy Court in New York, said it wants to eliminate 789 dealerships by June 9. Many of the dealers' sales are too low, the automaker said. Just over 50 percent of dealers account for about 90 percent of the company's U.S. sales, the motion said. Dealers were told Thursday morning through United Parcel Service letters if they would remain or be eliminated. The move, which the dealers can appeal, is likely to cause devastating effects in cities and towns across the country as thousands of jobs are lost and taxes are not paid. Chrysler spokeswoman Kathy Graham would not comment other than to say the company will notify dealers before speaking publicly. A hearing is scheduled for June 3 in U.S. Bankruptcy Court in New York to determine whether to approve Chrysler's motion. Judges often rely on companies in bankruptcy to help determine what is in their best business interest, such as the closure of dealerships or cancellation of contracts. Don Burk, co-owner of Heritage Chrysler Jeep in Ozark, Mo., said he found out that Chrysler plans to get rid of his dealership when he opened his UPS letter Thursday morning. "Right now I'm processing the information," he said shortly after reading the letter. "I'm sure I'm going to get with my partner and we'll decide what to do from here." The dealership, in a city of about 10,000 near Springfield, Mo., is involved in the community, sponsoring sports teams and even buying championship rings for the Ozark High School girls basketball team when it won the state championship several years ago, Burk said. "If you're a good-sized business, kind of by default you're involved a lot," he said. Chrysler dealerships aren't the only ones scheduled to get bad news this week. General Motors Corp. says it is notifying 1,100 dealers that it will not renew their franchise agreements when they expire at the end of September of 2010. In its motion, Chrysler said it has many dealerships that sell one or two of its brands, with Chrysler-Jeep dealerships competing against Dodge dealers as well as other automakers' stores across the country. "In addition, as suburbs grew and the modern interstate system continued to evolve, longstanding dealerships no longer were in the best or growing locations," the company said in its filing. "Many rural locations also served a diminishing population of potential consumers. Some dealership facilities became outdated. Other locations faced declining traffic count and declining populations." Chrysler said in its filing that dealers are not competitive enough with foreign brands. Chrysler sold an average of 303 vehicles per dealer in 2008, according to its filing. By contrast, Honda Motor Co. sold about 1,200 vehicles per dealer, while Toyota Motor Corp. sold nearly 1,300 per dealer. Chrysler said its dealer network "needs to be reduced and reconfigured in a targeted manner to strengthen the network and dealer profitability and to achieve optimal results for the dealers and consumers." Chrysler has received $4 billion in federal loans and has been operating in bankruptcy protection since April 30. Its sales this year are down 46 percent compared with the first four months of last year and it reported a $16.8 billion net loss for 2008. General Motors has a June 1 government-imposed deadline to come up with a viable restructuring plan or join Chrysler in Chapter 11 bankruptcy protection. Dealers around the country are gearing up for a battle against the two automakers, but it's not clear how much power they'll have to save themselves. Legal battles with the dealers could delay Chryslerâ?Ts exit from a government-forced bankruptcy within the time frame of 30 and 60 days projected by the Obama administration. Some Chrysler dealers who fear they will lose their franchises have formed a committee and hired lawyers. In conjunction with the National Automobile Dealers Association, a trade group, the committee has asked Chrysler dealers to contribute $4,000 each to a legal fund, according to news reports. I guess what I don't understand is why closing dealerships is going to help Chrysler? My understanding is that Chyrsler doesn't subsidize the dealer, they just sell to them and reimburse them for warranty service. So doesn't less dealers mean less possible sales? It seems the dealership itself should decide whether they can afford to continue to sell Chysler products. But maybe I'm missing something since GM is doing the same thing. |
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How will dealers 'dodge' teh ax?
Electrician wrote:
> "'Teh' Fortisque Flatiron" > wrote in message > ... > Chrysler aims to close 789 dealerships > Move could cost cities around the country jobs and tax revenue > The Associated Press > NEW YORK - Chrysler LLC wants to eliminate roughly a quarter of its > 3,200 U.S. dealerships by early next month, saying in a bankruptcy court > filing Thursday that the network is antiquated and has too many stores > competing with each other. > The company, in a motion filed with the U.S. Bankruptcy Court in New > York, said it wants to eliminate 789 dealerships by June 9. Many of the > dealers' sales are too low, the automaker said. Just over 50 percent of > dealers account for about 90 percent of the company's U.S. sales, the > motion said. > Dealers were told Thursday morning through United Parcel Service letters > if they would remain or be eliminated. The move, which the dealers can > appeal, is likely to cause devastating effects in cities and towns > across the country as thousands of jobs are lost and taxes are not paid. > Chrysler spokeswoman Kathy Graham would not comment other than to say > the company will notify dealers before speaking publicly. A hearing is > scheduled for June 3 in U.S. Bankruptcy Court in New York to determine > whether to approve Chrysler's motion. > Judges often rely on companies in bankruptcy to help determine what is > in their best business interest, such as the closure of dealerships or > cancellation of contracts. > Don Burk, co-owner of Heritage Chrysler Jeep in Ozark, Mo., said he > found out that Chrysler plans to get rid of his dealership when he > opened his UPS letter Thursday morning. > "Right now I'm processing the information," he said shortly after > reading the letter. "I'm sure I'm going to get with my partner and we'll > decide what to do from here." > The dealership, in a city of about 10,000 near Springfield, Mo., is > involved in the community, sponsoring sports teams and even buying > championship rings for the Ozark High School girls basketball team when > it won the state championship several years ago, Burk said. > "If you're a good-sized business, kind of by default you're involved a > lot," he said. > Chrysler dealerships aren't the only ones scheduled to get bad news this > week. General Motors Corp. says it is notifying 1,100 dealers that it > will not renew their franchise agreements when they expire at the end of > September of 2010. > In its motion, Chrysler said it has many dealerships that sell one or > two of its brands, with Chrysler-Jeep dealerships competing against > Dodge dealers as well as other automakers' stores across the country. > "In addition, as suburbs grew and the modern interstate system continued > to evolve, longstanding dealerships no longer were in the best or > growing locations," the company said in its filing. "Many rural > locations also served a diminishing population of potential consumers. > Some dealership facilities became outdated. Other locations faced > declining traffic count and declining populations." > Chrysler said in its filing that dealers are not competitive enough with > foreign brands. Chrysler sold an average of 303 vehicles per dealer in > 2008, according to its filing. By contrast, Honda Motor Co. sold about > 1,200 vehicles per dealer, while Toyota Motor Corp. sold nearly 1,300 > per dealer. > Chrysler said its dealer network "needs to be reduced and reconfigured > in a targeted manner to strengthen the network and dealer profitability > and to achieve optimal results for the dealers and consumers." > Chrysler has received $4 billion in federal loans and has been operating > in bankruptcy protection since April 30. Its sales this year are down 46 > percent compared with the first four months of last year and it reported > a $16.8 billion net loss for 2008. > General Motors has a June 1 government-imposed deadline to come up with > a viable restructuring plan or join Chrysler in Chapter 11 bankruptcy > protection. > Dealers around the country are gearing up for a battle against the two > automakers, but it's not clear how much power they'll have to save > themselves. Legal battles with the dealers could delay > Chryslerâ?Ts exit from a government-forced bankruptcy within the > time frame of 30 and 60 days projected by the Obama administration. > Some Chrysler dealers who fear they will lose their franchises have > formed a committee and hired lawyers. In conjunction with the National > Automobile Dealers Association, a trade group, the committee has asked > Chrysler dealers to contribute $4,000 each to a legal fund, according to > news reports. > > I guess what I don't understand is why closing dealerships is going to help > Chrysler? My understanding is that Chyrsler doesn't subsidize the dealer, > they just sell to them and reimburse them for warranty service. So doesn't > less dealers mean less possible sales? It seems the dealership itself should > decide whether they can afford to continue to sell Chysler products. But > maybe I'm missing something since GM is doing the same thing. Because it means intense competition that makes prices fall, unsold inventories,etc. And the dealers are not exactly totally unconnected to the mfg. There are many financial intertwinings. The avg Honda or Toyota dealer sells 1300 cars/yr, Chrysler is like 308. |
#5
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How will dealers 'dodge' teh ax?
Many point out the numbers of sales of Honda to Chrysler ??? Could the
reason for that be the products Chrysler sells that lost them sales ?? Nothing loves gas and repairs like a Chrysler rig... Lansing "Tony D." > wrote in message m... > Electrician wrote: >> "'Teh' Fortisque Flatiron" > wrote in message >> ... >> Chrysler aims to close 789 dealerships >> Move could cost cities around the country jobs and tax revenue >> The Associated Press >> NEW YORK - Chrysler LLC wants to eliminate roughly a quarter of its >> 3,200 U.S. dealerships by early next month, saying in a bankruptcy court >> filing Thursday that the network is antiquated and has too many stores >> competing with each other. >> The company, in a motion filed with the U.S. Bankruptcy Court in New >> York, said it wants to eliminate 789 dealerships by June 9. Many of the >> dealers' sales are too low, the automaker said. Just over 50 percent of >> dealers account for about 90 percent of the company's U.S. sales, the >> motion said. >> Dealers were told Thursday morning through United Parcel Service letters >> if they would remain or be eliminated. The move, which the dealers can >> appeal, is likely to cause devastating effects in cities and towns >> across the country as thousands of jobs are lost and taxes are not paid. >> Chrysler spokeswoman Kathy Graham would not comment other than to say >> the company will notify dealers before speaking publicly. A hearing is >> scheduled for June 3 in U.S. Bankruptcy Court in New York to determine >> whether to approve Chrysler's motion. >> Judges often rely on companies in bankruptcy to help determine what is >> in their best business interest, such as the closure of dealerships or >> cancellation of contracts. >> Don Burk, co-owner of Heritage Chrysler Jeep in Ozark, Mo., said he >> found out that Chrysler plans to get rid of his dealership when he >> opened his UPS letter Thursday morning. >> "Right now I'm processing the information," he said shortly after >> reading the letter. "I'm sure I'm going to get with my partner and we'll >> decide what to do from here." >> The dealership, in a city of about 10,000 near Springfield, Mo., is >> involved in the community, sponsoring sports teams and even buying >> championship rings for the Ozark High School girls basketball team when >> it won the state championship several years ago, Burk said. >> "If you're a good-sized business, kind of by default you're involved a >> lot," he said. >> Chrysler dealerships aren't the only ones scheduled to get bad news this >> week. General Motors Corp. says it is notifying 1,100 dealers that it >> will not renew their franchise agreements when they expire at the end of >> September of 2010. >> In its motion, Chrysler said it has many dealerships that sell one or >> two of its brands, with Chrysler-Jeep dealerships competing against >> Dodge dealers as well as other automakers' stores across the country. >> "In addition, as suburbs grew and the modern interstate system continued >> to evolve, longstanding dealerships no longer were in the best or >> growing locations," the company said in its filing. "Many rural >> locations also served a diminishing population of potential consumers. >> Some dealership facilities became outdated. Other locations faced >> declining traffic count and declining populations." >> Chrysler said in its filing that dealers are not competitive enough with >> foreign brands. Chrysler sold an average of 303 vehicles per dealer in >> 2008, according to its filing. By contrast, Honda Motor Co. sold about >> 1,200 vehicles per dealer, while Toyota Motor Corp. sold nearly 1,300 >> per dealer. >> Chrysler said its dealer network "needs to be reduced and reconfigured >> in a targeted manner to strengthen the network and dealer profitability >> and to achieve optimal results for the dealers and consumers." >> Chrysler has received $4 billion in federal loans and has been operating >> in bankruptcy protection since April 30. Its sales this year are down 46 >> percent compared with the first four months of last year and it reported >> a $16.8 billion net loss for 2008. >> General Motors has a June 1 government-imposed deadline to come up with >> a viable restructuring plan or join Chrysler in Chapter 11 bankruptcy >> protection. >> Dealers around the country are gearing up for a battle against the two >> automakers, but it's not clear how much power they'll have to save >> themselves. Legal battles with the dealers could delay >> Chryslerâ?Ts exit from a government-forced bankruptcy within the >> time frame of 30 and 60 days projected by the Obama administration. >> Some Chrysler dealers who fear they will lose their franchises have >> formed a committee and hired lawyers. In conjunction with the National >> Automobile Dealers Association, a trade group, the committee has asked >> Chrysler dealers to contribute $4,000 each to a legal fund, according to >> news reports. >> >> I guess what I don't understand is why closing dealerships is going to >> help Chrysler? My understanding is that Chyrsler doesn't subsidize the >> dealer, they just sell to them and reimburse them for warranty service. >> So doesn't less dealers mean less possible sales? It seems the dealership >> itself should decide whether they can afford to continue to sell Chysler >> products. But maybe I'm missing something since GM is doing the same >> thing. > > Because it means intense competition that makes prices fall, unsold > inventories,etc. And the dealers are not exactly totally unconnected to > the mfg. There are many financial intertwinings. > The avg Honda or Toyota dealer sells 1300 cars/yr, Chrysler is like 308. |
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