Chrysler Co-Prez Jim Press and GM CEO Fritz Henderson faced congressional opprobrium this afternoon, as our duly elected representatives lamented the fact that the two zombie automakers are pulling the rug from under the pols’ financial backers—I mean, cutting car dealers. Never mind the bollocks; the bailout bonanza just got a big bigger. Detroit News reports that Henderson told the Senate that “GM could have 3,500-3,800 dealers by the end of next year, a reduction of 2,300-2,600 dealers. He said the reductions were painful but unavoidable.” Applying this morning’s pay-off formula (an average of $500,000 per dealer), that raises the price of the federally-sponsored sayonara to $1.1 billion to $1.3 billion. But don’t worry, ’cause Fritz feels their pain and promises this is the last last time GM will downsize.
“I do not see our dealers as ‘dots on a map’ or ‘lines on a spread sheet.’ Many of these dealers have passed on their franchise through generations. They are members of a larger GM family which makes this process so heart-wrenching for me . . . This is our last chance to get it right — to fix permanently those parts of the business that have diverted us from consistently building winning cars and trucks and the consumer experience to match. Because of today’s global, economic crisis we are out of time and money.”
HE DID IT AGAIN! He shirked the blame for GM’s failure!
“Because of today’s global, economic crisis we are out of time and money.”
So, I wonder, are we going to see a list of dealers this time?
Why is GM phasing stuff out and pushing the end date to next year? The whole point of Chapter 11 is that they can cut stuff off cold turkey! If this is what they are doing, then GM won’t be emerging from Chapter 11 for at least a year and a half.
GM needs to publish the dealers who are getting killed. Perhaps GMAC could release a list of dealers they have killed off through the freezing of inventory credit lines since last year. GMAC should also include in that list dealers they cut off that had GMAC-financed new facilities that now sit empty, as is the case in my town here in Amador County, CA. Since us taxpayers are now paying the freight for both GM and GMAC, that’s the least they could do. The closing of my local GM dealer makes it very inconvenient to buy another GM vehicle, as the next closest GM dealer is one hour away. I’m now paying for that empty new facility in my town because of GMAC’s actions. I want a refund on my share of the GM and GMAC bailouts. When or if my local dealer is reinstated, then I will resume buying GM products. If it isn’t (which is likely), I’m off to Toyota, never to return to GM.
“I do not see our dealers as ‘dots on a map’ or ‘lines on a spread sheet.’
True. You see them as an expendable part of the GM ‘family’. Kind of the same way most consumers see GM’s products.
They would cut more dealers, and give them much less kiss-off money, if this was a REAL bankruptcy and not a political-organized operation.
Any money being given by GM and Chrysler to closing dealers should be tracked and added back as debt to be repaid to the government along with the rest of the bailout money by the ‘good’ GM and Chrysler once the BK proceedings are finished.
They would cut more dealers, and give them much less kiss-off money, if this was a REAL bankruptcy and not a political-organized operation.
The conservatives need to get their act together on this point. It’s either too much money, or too little. Just pick one, you can always make up the argument how it’s the government’s fault either way.
If it takes a bit of palm greasing for these dealers to GTFO, then so be it. There were too many of them, and most of them had crappy customer service.
What dealer dies? I don’t care, as long as they chop the numbers down. Maybe this will serve notice to the ones that remain that they’d better pick their game up, or they’re next.
The conservatives need to get their act together on this point.
You mean Republicans, not Conservatives. Conservatives have been walk the line consistent with this – that is, bailouts are delaying the inevitable failure of GM and Chyrsler.
Both parties are complicit in this charade. Of course, with the Dems in power, they’ll be the ones blamed for this in a few years… or sooner.
Conservatives have been walk the line consistent with this – that is, bailouts are delaying the inevitable failure of GM and Chyrsler.
That’s exactly the expectation whether you agree with the social argument or not. However, since the decision is to cushion the d2 fall with $, it’s advisable to do it in the best way possible so that you end up spending the least amount for the desired effect.
This is why some have been applauding the government for doing a quite excellent job thus far, which shows they are aware of contemporaneous events, and others are still behind in their understanding of what’s been going on.
Did Fritz say the dealers were one of the reasons why GM could not build winning cars and trucks???!!! Oh my my.
In response to the fellow in Amador , County, Calif I worked for the Chevy dealer in Dublin, Calif for over thirty years and I know the parts manager at your store as he worked for me in the 80’s and 90’s. From what I know about Prospect Motors and the owner I think what happened to him and his business was a travesty. Gmac virtually destroyed his business and lifes work without just cause. This was a very good dealer and has now left a vacume in a huge area of the the sierra foothills for car buyers and customers needing service and parts. Destroying all these dealers is crazy. The failed incompetent management at GM and Chrysler is going along with the idea as it deflects the blame that is theirs and unjustly seems to focus it on the dealers. How can shutting down dealers sell more cars. The loss of good will toward GM which is pretty low already has turned to outright hatred from many of the people I know that are dealer employees, former employees, retired GM employee’s. These folks who used to be loyal flag wavers for GM are now mad as hell and serve now to be powerfull vocal advocates for not doing business in the future with General Motors.
I think it’s Congress who’s smoking something, not just Fritz.
This sounds the same as when they try to close military bases everywhere “except in my district”. Gimme a break – bankruptcy and cost reduction means you’ve gotta get rid of a lot of dealers.
This is why some have been applauding the government for doing a quite excellent job thus far, which shows they are aware of contemporaneous events, and others are still behind in their understanding of what’s been going on.
Of course, the unwashed masses are incapable of understanding the complex tendencies in the market viewed on the macro-scale.
Your sound exactly like the Russian intelligentsia did – in 1917 justifying the Russian October Revolution.
That’s exactly the expectation whether you agree with the social argument or not.
Do you have information that refutes this conclusion? If so, please share. If you agree with this, then agreeing to piss away billions is simply wasteful and disrespectful to those covering the bill.
However, since the decision is to cushion the d2 fall with $, it’s advisable to do it in the best way possible so that you end up spending the least amount for the desired effect.
You’re advocating putting off the hard decisions to deal with the real problems tomorrow. To do so will likely cost taxpayers 100-200 billion ON TOP OF what will be the social costs that will be incurred anyway. It’s just nonsense.
This is head in the sand thinking.
Of course, the unwashed masses are incapable of understanding the complex tendencies in the market viewed on the macro-scale.
They’re perfectly capable of understanding it, there’s certainly large quantities of educational material, but that would abandon the safe harbor of conservative values of acting stubborn and stupid.
–
Your sound exactly like the Russian intelligentsia did – in 1917 justifying the Russian October Revolution.
And Obama’s middle name is Hussein, so he MUST be a dictator. <- Irrefutable logic.
–
Do you have information that refutes this conclusion? If so, please share.
No, see, you’re confused. I’m agreeing with you on the premise.
–
You’re advocating putting off the hard decisions to deal with the real problems tomorrow. To do so will likely cost taxpayers 100-200 billion ON TOP OF what will be the social costs that will be incurred anyway.
I’ll even agreeing that in good times, GM shouldn’t and wouldn’t get a bailout. Hell, screw it, I’ll even agree that the market does a decent job of allocating resource like humans under normal conditions.
See? Even conservatives can be right just like broken clocks. But logic works best when you string together different statements like those above. Stay with me here. It follows that by delaying the collapse, we will arrive at the other side of the business cycle, and your precious “market” will magically take care of the then newly unemployed.
Hell, a miracle might occur (and I know y’all are big on those, so pray hard), and the new management at the d2 may be success enough to turn things around, leaving smaller but viable business entities. Don’t question the work of the Lord.
Chump change.
*Boycott Government Motors*
Boycott Government Motors
What’s so funny there is that this will only increase the price of the bailout.
But it must feel so good to stick it to the already downtrodden. Scientists hypothesize it starts with kicking strays, then beating hobos.
You know what next, we should be boycotting/sanctioning/punishing whole countries for the ideology of their government. Oh wait…
Personally, I would give all the GM Dealers the current inventory they have standing on their lots, say sorry for letting them down, and let them sell these cars for whatever they can get over the next 18 months while the shiny new GM retools and rearms.
This would give the dealers a healthy flow of new customer purchases and would allow current and new customers to continue using these dealers/service outlets for repairs etc.
Surely this would work out better than paying them extra bailout cash and cutting them and their current customers loose to drown?
@agenthex
Hell, a miracle might occur (and I know y’all are big on those, so pray hard), and the new management at the d2 may be success enough to turn things around, leaving smaller but viable business entities. Don’t question the work of the Lord.
New management? What new management? The new management is the old management.
agenthex :
June 4th, 2009 at 1:25 am
Boycott Government Motors
What’s so funny there is that this will only increase the price of the bailout.
No. A customer boycott reduces the cash burn time between now and when the federal government finally gives up trying to run a car company. If they throw in the towel soon before truck models become outdated a successful car company may be able to pick up the pieces and build Wranglers, Rams, Silverados, Tahoes, etc while euthanizing the Sebring, etc. The market seems to be saying yes to some GM and Chrysler trucks and no to their cars.
GeorgeB,
You’re right, but unless you’ve got a ‘D’ next to your name, agenthex will just say you’re wrong.
The arguments he uses are the best examples of what happens when you trade accepting facts (lack of leadership/product pipeline, profits at GM) for an emotionally appealing, but ultimately inaccurate picture of GM’s reality.
This thinking is the end result of what happens to people when the D or the R next to their name matters more than what reality actually is.
New management? What new management? The new management is the old management.
I hope people remember this claim and own up to it when the gov hands off management to whomever they can find to run the joint.
I mean, it already happen in Chrysler’s case, so I’m not sure why people think it’s never happen in GM’s.
–
No. A customer boycott reduces the cash burn time between now and when the federal government finally gives up trying to run a car company.
Since the whole point of the exercise is to retain jobs, they’ll just cut prices until the cars sell, so…
–
If they throw in the towel soon before truck models become outdated a successful car company may be able to pick up the pieces
You mean like fiat with chrysler, and decent possibility of renault/nissan with GM? Coincidentally, you already have a bunch of Non-TARP retards Saviors of Capitalism desiring more than 2bil for their assets. How much do you think they would’ve gotten if the fed hadn’t been generous with that deal?
–
This thinking is the end result of what happens to people when the D or the R next to their name matters more than what reality actually is.
I assure you people are perfectly capable of in being idiots without an extension to their name. For example, you don’t have one.
In general it helps to have a decent argument. I suggest working on that instead of a D name extension.
It is stupid for GM to close dealerships; how is this going to save them money? They make money off of dealerships in a number of ways, like selling them parts, and brochures. Cutting dealerships, means less revenue, and spending big bucks to shut them down. If they just let things run the natural course, a large number of them will go out of business any way. Some of the ones that were not cut are on the verge of BK any way, GM is hoping to save some of their big points that have been poorly run, by wiping out the competition. So let’s get rid of a little guy that is doing a great job, but not selling as many cars because they don’t want to compete in a deceptive manner (like Bill Heard)
And Obama’s middle name is Hussein, so he MUST be a dictator. <- Irrefutable logic.
He’s a radical, his friends are radical, his policies are pretty radical too.
Just look at what he’s doing with GM.
Pretty obvious unless you posses a progressive mindset.
He’s a radical, his friends are radical, his policies are pretty radical too.
Sure, I guess if you have extremely low standards for accurately defining what words and ideas mean like most all conservatives, you can assert that anyone is anything.
It also helps to have no real sense of history, very little intellectual curiosity, and willingness to think within very narrowly defined bounds.