For the last ten years or so, the United Auto Workers (UAW) has pretended to make “concessions” to General Motors while doing nothing more than accepting pay-offs consisting of lump sums and promises to pay lump sums from fictional future earnings. Exhibit R: the fed’s recently promised $2.5 billion cash “top-up” of the UAW’s health care VEBA, ahead of other payment of other lump sums AND a slice of fictional future earnings. Automotive News [sub] reports that GM’s deep-sixed dealers are now playing grease my palm at wounded knee. “General Motors is offering some dealerships $100,000 to $1 million to wind down their businesses over the next 17 months, according to three sources familiar with the proposals.”
Let’s assume the average dead dealer gets a $500,000 kiss off. GM announced it was terminating 1124 dealers. I make that a $562 million pay off (as opposed to a zero dollar FO&D possible under bankruptcy law). I reckon we got a bargain mate! GM’s Oldsmobile termination reported cost GM a billion bucks, back when a billion was more than a rest stop on the way to $100 billion. Or a trillion. So, what do we get for our money?
The money is intended to help dealers sell their remaining inventories. But if the dealer accepts the payment, GM will not buy the unsold inventory. In addition, the dealer must agree not to sue GM until their franchise agreement expires. The terminated dealers also will not be allowed to order new cars from GM, yet they must stay in business until January.
GM’s army of the undead! And what’s with the “until their franchise agreement expires?” Does that mean we’re looking at hundreds of millions in federally-funded lawyers fees defending Government Motors against dealer lawsuits? Sure!
This, no doubt, at the same time that those discontinued dealers will land themselves the Small Business Administration loan guarantees to buy product GM won’t sell them. While we’re at it, I wonder where the funding for the freshly mandated GM dealership upgrade is gonna come from? Hey Tony?
Our tax money was hard at work in May.
In Porsche showrooms. AN reports 1,979 retail deliveries.
The TARP dough has been located! The bosses are buying Porsches.
I don’t care who you are, that there is a known “leading indicator”.
Good times!
I just don’t get it. Why won’t they just mail out a couple thousand letters while in C11?
Dear Valued Dealer,
We at GM want to thank you for selling our shitty products for the past xxx years. Now go piss off. Good luck with the law suit, we’re under protection by the court. Na na na na boo boo.
Sincerely,
GM Management
@bluecon The CAW made the incentive deal last summer.The 30+ unskilled employee was offered 100K and a 35K car voucher.Sept 12 2008 was the cut off date.The employee was retired at the company option any time during the 2009calander year.That offer expired on Sept 13 2008.
In Oshawa it was meant to cover the Truck closure.The same plant that GM promised to keeep open,two weeks earlier.Windsor transmission got a slightly different deal.
The offer was put on the table,it was take or leave it.2600 jumped on it I’m one of them.If the offer wasn’t made,we would have 2600 more people on EI/welfare.
This exhibits the difference between bankruptcy and political bankruptcy. In a regular bankruptcy reorg, we do what will help the company slim down and come out healthy. In political bankruptcy, the company keeps or takes on lots of debt that will help politically popular creditors. This is not going to help New GM, but is only politcal payoff so that the dealers don’t get in the way of the political payoff to the union.
These incompetent failures at GM (led by you LaNeve) have obviously been planning these closures for some time. Now they are making their move, hiding like the sissy scoundrals they are behind the veil of bankruptcy. All they are capable of is blaming everything and everyone but themselves. It’s time we all join forces and rid ourselves of the one and true reason for GM’s decline, and that is the absolutely worse excuses for management ever. These fools are nothing more than clowns in business suits. They are causing heartache and destruction across our country and it’s time we act like the Americans we are, and defend ourselves against this economic terrorism. It has become incumbent upon us to rise up against these self serving, isolated, insulated, egotistical, lying bastards!
I am ready, willing, and able to lead the charge.
“The terminated dealers also will not be allowed to order new cars from GM”
Bug or Feature?
Buickman:
Correct about using new political cover to implement dealer termination plans they’ve had for years. Spineless.
As for clowns in business suits, I’ll take your LaNeve and rasie you a Bernie Ebbers and a Ken Lay.
Saddest part is these numbnuts will end up trashing another company a la Bob Nardelli. Personally I’d like to see all of them mis-managing 7-11s in Minot N.D.
I’m on record saying these dealer closures are a bad idea. Paying them cash money to go away just makes it dumber.
Paying employees to go away at least reduces a real, measurable ongoing cost. Paying a customer to go away, doesn’t.
I don’t get it…wasn’t one of the advantages of C11 the ability to pare the dealer network without such payouts? They could have done this years ago ala Oldsmobile! At least Chrysler had the balls to cut the cord clean. GM is dithering already in only it’s 2nd day of C11. That can’t be good.