Lakes Chrysler-Jeep

[SAMIAM]

I have bought several vehicles from Alan Silberberg over the years and don't blame him for being bitter at Chrysler for throwing him and 800 other loyal dealers to the dogs,Alan is a joy to deal with.Honest,fair and always cheerful and positive,even in tough economic times.Nice way for Chysler to thank him for his years of loyalty.
I thought the original "bailout" was supposed to save the auto industry....now two of them are closing nearly 2,000 dealerships,going bankrupt and needing even more money to survive,all while protecting lavish union benifits that caused the problem in the first place.
This whole bailout scheme has been a total failure.
I wish Alan and his crew the best,hopefully his customers will still support him.

[LIforrelaxin]

This was bound to happen.... Many dealerships will be closing over the next year, even with the bail out money.

My opionion always has been that the government should have stayed out of it. And just let the Auto companies go through what they are going to go through anyways....

As for the Unions, Yes they deserve some blame, that is for sure, but they are not the total cause....We as consumers who kept paying the out of control prices deserve some blame too.... Peoples cars have become a extension of them selves, and the auto companies, thrieved by make things more plush... which drived the prices, up and the profits, as people kept buying more and more expensive vehicles.... the Unions reacted by wanted more for there union members.... so it is a vicious circle.... what is injust is that now the profits aren't there the unions seem to be of the opinion they would rather see there members out of work then take a pay/benefit cut....

[ITD]

The only question I have is who is going to bail out the taxpayers from this unprecedented travesty.

[sa meredith]

Originally Posted by LIforrelaxin

This was bound to happen.... Many dealerships will be closing over the next year, even with the bail out money.

My opionion always has been that the government should have stayed out of it. And just let the Auto companies go through what they are going to go through anyways....

As for the Unions, Yes they deserve some blame, that is for sure, but they are not the total cause....We as consumers who kept paying the out of control prices deserve some blame too.... Peoples cars have become a extension of them selves, and the auto companies, thrieved by make things more plush... which drived the prices, up and the profits, as people kept buying more and more expensive vehicles.... the Unions reacted by wanted more for there union members.... so it is a vicious circle.... what is injust is that now the profits aren't there the unions seem to be of the opinion they would rather see there members out of work then take a pay/benefit cut....

Good points made in this post...
I saw a commercial very recently, that I believe was for a major insurance company. It had a great line in it....something like this: "2009 is the year that people stopped thinking of cars as a way of showing people how far they had come, but rather of a way of simply getting to where they need to go." Something like that... The little sentence holds great truth.

By the way, as people continue to voice their opinion of bailout, Chrysler closings, GM bankruptcy...why no props for Ford, which has taken no federal money, and contiues to work toward a full recovery???

[John A. Birdsall]

Someone asked who is going to bail us out. It is very clear to me except I went from my great grandchildren to my grandchildren will be the ones to pay for this. I hope Obama sees what he has done to his own children.

[fatlazyless]

I just heard a radio ad yesterday for Lakes Chrysler Jeep which promoted their service dept, which now will have much lower rates than before. Same mechanics and service but lower rates as it is no longer a Jeep dealership, plus they work on any vehicles and will now become a 'previously owned' car store.

Who knows, maybe it will become a Suzuki car dealership? Where is the next closest Suzuki dealer? A mecca for all those old, square, little Geo Trackers that are still going strong, around the local roads?

[WinnDixie]

Originally Posted by sa meredith

Good points made in this post...
By the way, as people continue to voice their opinion of bailout, Chrysler closings, GM bankruptcy...why no props for Ford, which has taken no federal money, and contiues to work toward a full recovery???

As we've watched this mess unfold, we are at the place now where Ford is the only American vehicle we want to consider. Besides, the Ford product we have now is the best car we've had, after years of buying Chevrolets.

But my main reason to post here is that my husband has not yet heard a convincing argument for why the dealerships being closed saves GM..or (what was) Chrysler money? I keep taking a stab at: "They'll be making fewer of the product and don't want to have so many dealers to have to supply "(?). He says if a dealer is selling well, they'll be provided with the product! So what's a reason that saves GM, et al money? Other than providing the products, what costs occur for GM or Chrysler from having franchises at these dealers? We honestly don't know, and one keeps hearing of profitable dealerships that are being closed.

[vmartino26]

The automobile situation is surely a mess. But I did get a bit of a better understanding of it yesterday on CNBC. I'll use round numbers. There were approximately 2,600 Chrysler dealerships nationwide last year. With the closing of some 700 dealerships, Chrysler is left with 1,900 dealerships nationwide. Honda, which outsells Chrysler monthly, has only 1,300 dealers nationwide. So with less dealers, Honda sells more cars. It seems many in the auto industry feel that with so many dealerships, each Chrysler dealer was in fact competing against another Chrysler dealer. I don't know if I buy that thought, though. What it comes down to is building a better vehicle. They can call it the "new" Chrysler or the "refined" Chrysler or the "lean and mean" Chrysler organization, but they have to build a better car. Then they have to figure out how to get the next generation out of their BMW's and Toyotas and Hondas and Nissans and back into a Chrysler. It's a tough sell. They could do everything right -- become lean and mean, build a great new car, and have nobody buy it because people don't want to take a chance on a new Chrysler. Good luck.

[EZ-Pass]

Originally Posted by WinnDixie

As we've watched this mess unfold, we are at the place now where Ford is the only American vehicle we want to consider. Besides, the Ford product we have now is the best car we've had, after years of buying Chevrolet's.

But my main reason to post here is that my husband has not yet heard a convincing argument for why the dealerships being closed saves GM..or (what was) Chrysler money? I keep taking a stab at: "They'll be making fewer of the product and don't want to have so many dealers to have to supply "(?). He says if a dealer is selling well, they'll be provided with the product! So what's a reason that saves GM, et al money? Other than providing the products, what costs occur for GM or Chrysler from having franchises at these dealers? We honestly don't know, and one keeps hearing of profitable dealerships that are being closed.

Anything a dealer gets from GM is paid for by the dealership. All the literature and that is given away plus all advertising goody materials are purchased by the dealers. The cars are purchased from GM and most of the time go on floor plan which is money from the banks to the dealership to pay GM for the cars. So every car on the lot GM has been paid for as soon as it is delivered. That is the way the finance person at my dealership told me along with my wife who has worked for a Chevy dealership for over 30 years up until the other day. GM does not lose a thing as said above everything is paid for by the dealership.

[brk-lnt]

Originally Posted by EZ-Pass

Anything a dealer gets from GM is paid for by the dealership. All the literature and that is given away plus all advertising goody materials are purchased by the dealers. The cars are purchased from GM and most of the time go on floor plan which is money from the banks to the dealership to pay GM for the cars. So every car on the lot GM has been paid for as soon as it is delivered. That is the way the finance person at my dealership told me along with my wife who has worked for a Chevy dealership for over 30 years up until the other day. GM does not lose a thing as said above everything is paid for by the dealership.

What you wrote is mostly correct, but does not take everything into account.

You are correct that from a pure numbers perspective in terms of looking at cars and marketing materials, there is no carry cost to GM for a given dealership.

However, for each dealership out there, the auto companies have back-end costs. They maintain a proportionate amount of technical trainers to go to the dealerships and train the mechanics. They maintain a number of sales, marketing and accounting people to work with the dealers and verify and audit numbers. So, with fewer dealers, they needs fewer back-end support people at "headquarters".

Then there are the non direct costs. If there are too many dealers in a given region, they ARE competing for each others business. The price undercutting and goofy sales tactics can weaken the overall brand, or turn consumers off. As sales drop, dealers become more desperate for the remaining business and get more aggressive, resulting in consumers thinking "those cars must be junk, they can't even GIVE them away".

The car companies also want the auto lots to look well stocked, and they want to build just enough cars to meet demand. If demand drops, production drops, so there are fewer cars to spread around the existing dealers. This makes the lots look barren and makes consumers uneasy (I was at a Jaguar dealer recently that literally had like 4 new cars on the lot, did not instill a feeling of confidence in the dealer OR the brand).

So, the dealerships being closed do not have a directly measurable impact on expenses, but the "soft" expenses and liabilities are fairly significant when you break it all down.

[WinnDixie]

Originally Posted by brk-lnt

What you wrote is mostly correct, but does not take everything into account.



So, the dealerships being closed do not have a directly measurable impact on expenses, but the "soft" expenses and liabilities are fairly significant when you break it all down.

Thanks, all, for your explanations. Kind of looks like their worry of a "perception problem" plays a big role in the closings. Well, there might be more of a problem than they think...my perception of them now isn't too good! Can probably wrap it up in the word "distrust"....big time! I am sure I'm not alone, either. One more quick question...all the $$ paid to, say GM, by a dealership to have the franchise in the first place...just gone? The vehicles they bought...sell as best they can?? I sure wish Lakes Region Chrysler-Jeep and the other unfortunate dealers all the best of luck...but it sounds almost impossible!