The taxpayer-funded Cash for Clunkers (a.k.a. C.A.R.S.) “free money” program has had its fifteen minutes of fame. When the taxpayer-funded giveaway ran out of money, the MSM went mental. Here, at least, is a stimulus program (a.k.a. bailout) that works! Now that Congress has re-upped to the tune of two billion, you can expect the story to retreat into the figurative shadows, leaving the bankruptcy-dumped domestic dealers’ media meme at least two media cycles behind. Ah, but the axed dealers are rich and reliant. They haven’t given their legislative fight to restore their franchises. Thankfully (for them), New Chrysler is giving the story a new hook: awarding new franchises in the exact same territories where they killed dealers. In other words, they “stole” the stores for their cronies. We’re talking 140 “open points.”
Parse this, from Automotive News [AN, sub]:
Chrysler’s sudden firing of 789 dealerships was more than a strategy to cut the store roster. The company used bankruptcy to shed dealerships it considered underperforming.
So Chrysler has begun appointing new dealers in some of the 140 open locations left behind after bankruptcy. The new dealerships anger some rejected Chrysler dealers, who lost their stores just two months ago.
Huh? In plain English, Chrysler’s changed its tune. It’s gone from “we have too many stores” to “you suck” with FOAD thrown in for good measure.
AN cites two dealers in its story on this Italian orchestrated back-stabbing. One “winner” (i.e., a dealer taking over from an axed competitor) and one severely pissed-off former ChryCo store owner.
Chrysler’s plan to open a point near the rejected St. Charles dealership brought an angry reaction from Wade Walker, a rejected Vermont Jeep dealer and the founder of the Committee of Affected Chrysler Dealers. The group, now disbanded, formed in May to represent the rights of rejected dealers in U.S. Bankruptcy Court.
“They had no right to take it from the first dealer without good cause,” he says.
We can add another victim to AN’s roster: Jim Tarbox. Here’s Jim’s email on the subject:
I received a call this evening from Bill Doucette, North East Dealer Placement Manager for Chrysler. He said he has been trying to get the time to respond to some emails I had sent Phill Scroggin and Jim Press requesting that I have my franchises back. He said that Chrysler would consider me a CANDIDATE for the Attleboro Market and any other market that may be available. He said that the Attleboro Market is open and that they would CONSIDER me. I expressed to him that I am interested in getting both my franchises back. Both Attleboro, MA and North Kingstown, RI. He said that there was already a “letter of intent” with Bailey in NK, RI but that the Attleboro Market is open and if I had a building, etc… that they would consider me. Isn’t this harassment?
They just took everything away from me. I was the highest performing dealer in both locations. They take my franchise from me in NK and give it to someone else. They abandon the market in Attleboro, only to tell me I am a candidate now? Didn’t I just own both these franchises? I am still paying for these businesses. How can this be happening? Why did you take my franchises from me if you still wanted representation? Why did you take my franchises from me if I were a CANDIDATE? This is awful- It does NOT make sense? Why did they call me? Is it harassment? What is going on? I cannot take this. This is wrong! How can this be happening?
Given the way Chrysler axed their dealer base earlier this year, who in their right mind would sign up as a franchisee now?
It would appear, then, that Chrysler committed a fraud upon the bankruptcy court.
Stay classy, Chrysler.
“Given the way Chrysler axed their dealer base earlier this year, who in their right mind would sign up as a franchisee now?”
My thought exactly! Who in their right mind would ever want to do business with an organization that treats their “partners” like this?
Poor bastard got shafted. I’d like to feel sorry for him, but I gotta say that at least he knows how his customers felt like for years now.
The car industry is full of liars, weasels, cheats and sons of bitches. – Robert Farago, 7-17-09
Consumers wonder why automakers allow gypsies, tramps, and thieves to hold franchises. Because they is them!
There is an equally interesting article on AN about how the terminated dealers are getting screwed by Chrysler on the old parts.
What the factory does (first hand experience speaking) is call you up to ‘help’ you…by offering 30 cents on the dollar for the current parts inventory. They then call the dealer who is negotiating with them to get your former franchises for free, and say “You’ll get the franchises IF you agree to our facility requirements and parts stocking plan.”
The parts that need to be stocked? YOURS.
The whole Congressional song and dance was a fraud. This WAS about settling scores and rewarding cronies.
Hmmmm… Reads like an ideal test case.
Dealers, suppliers, customers with claims; they’re all gonna’ feel shafted when Fiatsco comes knocking on the door again as if nothing happened.
I would have to think under the circumstances described this former dealer does have legal recourse. Both GM and Chryco were able to use Federal bankruptcy laws to evade state franchise laws in terminating dealers without compensation. This dealer’s situation sounds like pure fraud on Chryco’s part and while juries don’t usually side with dealers especially in consumer vs. dealer lawsuits this is a completely different scenario.
Personally, I think Chryco is all but defenseless if the circumstances described are accurate. I don’t think Chryco will be able to hide under the bankruptcy veil either because the new Chryco LLC is involved, not just the bankrupted former Chyrco.
Jim Tarbox looks a lot older in that picture than he did just a year ago.
A little local background. Paul Bailey has helped Chrysler out a few times – first taking over a Dodge dealership and then consolidating it with a nearby Chrysler dealership. Paul Bailey’s owners have been good soldiers for Chryco.
Tarbox, on the other hand, vigorously defended his right to make a living by objecting to more Jeep stores close to him. If more Chryco dealers had done that, perhaps they would have been able to make a living without providing the sort of dealership experience that we’ve come to know and loathe. But, as all corporate level sales directors know, territories are infinitely sub-dividable and in doing so, benefits always accrue. Its the homeopathic approach to sales growth. So, Jim Tarbox, with his objections, was not a good soldier.
I hope he nails them. Whoever ‘them’ is that he can legally reach.
Disclaimer: I bought ’92 Bonneville from Tarbox Pontiac/Jeep and had no complaints with the dealership. Only memorable complaint with the car was the electronic dash that winked on and off. IIRC, the HUD speed display would still work and what GM sedan owner looks beyond that anyway?
Chuck:
Great illustration why this is really about ‘good’ and ‘bad’ soldiers, and not about any of the drivel Press spewed out in front of Congress.
I imagine that a state court would take the case, I imagine that a jury would award they dealer compensation.
Then it would hit the “federal” appeals court, who would defer to the “federal” bankruptcy court ruling based on thier finding merit that CryCo should be allowed to terminate said dealers based on critera provided and then every level above would reject hearing the appeal as meritless. And refer any future litigation to the liquidation corp. established as part of the bankruptcy and that chrysler as a new company is free to award franchises based on agreements and restrictions with dealers carried over to the new company.
Bankruptcy laws and rulings are very strong and were designed to keep politics and emotions (politicians and jurers) from being able to meddle in what is usually a very delicate and painful procedure.
rnc:
What if the evidence at the federal level showed that the criteria provided by Chrysler was laughably different from the actual facts of the terminations?
Thanks for your insights.
Thier recourse would be to the old ChryCo b/c that’s who terminated them (it would be considered the old ChryCo that did the lying). The new ChryCo is free and clear of all liabilities related.
The only theoretical recourse would be to try to reopen the bankruptcy case based on fraud.
Bankruptcy laws and rulings are very strong and were designed to keep politics and emotions (politicians and jurers) from being able to meddle in what is usually a very delicate and painful procedure.
Yes. That’s why it’s a shame that politics got involved from the very start, because we were told that the normal bankruptcy process wasn’t sufficient.
One interesting thing about all these dealer stories is how much of the copy seems to be taken right from the dealers mouth, every time.
It seems odd that a reporter who would be extreemly skeptical if the guy was selling him a car directly, will parrot his whole spin without comment if it’s ”news”.
What I’m saying is I haven’t seen an ”objective” or financial angled dealer story. They’re all “human interest” and practically dictated by the affected dealers.
AndrewDederer
Objectively, IIRC, Tarbox was a top 10% producer – per local newspaper accounts not contradicted by old Chryco. Bet that could be verified by, among other things, the plaques on his wall given by old Chryco in recognition. And paperwork – unless you thought it was all ginned up. Wonder if old Chryco has shredded that paperwork yet?
Chances are that per rnc, he is just screwed. Too bad he wasn’t a UAW guy. Would he have recourse to pierce the old corporate veil and go after the deciders? Would he have the resources to initiate the effort? Can he have Congress put in some special purpose legislation for him? The odds aren’t good.
Now that’s playing hardball.
Next thing ya know, Chrysler will be dating their wives and moms.
I wonder if Jim Tarbox realizes that Chrysler as a company employs a bunch of people who don’t really give a damn about him and instead care about making a nice little bonus this coming year.
And I wonder if he also realizes that his government doesn’t care about him either since Obama’s auto-team made it clear that no one is going to trample on the decisions made by their great auto industry investments.
This really isn’t any different than how things were prior to the bankruptcies. Did anyone really have faith/trust in their government? I also hope he didn’t have any trust in his Chrysler peers in Detroit. Dick, you know they’re going after the daughters next.