You seem to think you have a good idea what’s going on here, but from my perspective you haven’t got a clue.

Because of State franchise laws protecting franchisees a dealer has lots of rights and cannot have their franchise agreement canceled easily. In this case GM went bankrupt and the franchises were all re franchised with the new GM company unless GM decided not to.

But the decision on whether or not to close my doors, whether or not I am profitable, whether what I do for a living is worth the time and aggravation – all those decisions are rightfully mine. Not GMs, not some task force appointee. Mine. GM had no right, and the Obama administration should have never pushed it.

You see, it doesn’t matter one bit that GM has more Caddy dealers than Mercedes. It costs them nothing to have a franchise sitting there idle, and they make money when that franchise sells their cars. Sales per dealership is a BS measure, a useless comparator, and a straw argument made by people who made a poor decision and need to make it look like they did the right thing.

Whether or not they did it to reduce warranty costs, that argument makes no sense either. But what’s done is done. Mark Laneve told me they feel that a profitable dealership will reinvest in itself more than an unprofitable one, and he was probably right. But dealer profitability is not why GM had to take government funds to survive, and not why the treasury took them over. Dealers are a separate entity, privately owned and operated (with few exceptions). And it’s sort of funny that the new GM is now asking its dealers to conform to a common appearance theme at a time when their future is not certain. Oh sure, I’m about to spend half a million dollars to make my facility look like they think it should, after my Pontiac franchise was only worth $25k. Yeah, right…

Email – karen.applebee @ yahoo.com and let me know

last i read, there was some form of compensation from the manufacturer when a dealer was shut down, but not enough to cover their parts inventory, etc…not a fun situation to be in for sure…

From June:

http://archives.media.gm.com/servlet/GatewayServlet?target=http://image.emerald.gm.com/gmnews/viewmonthlyreleasedetail.do?domain=3&docid=54952

“This overall number of dealers is based on the previously announced potential sale of the Saturn, Hummer and Saab brands, or their phase-out if they can’t be sold; dealer attrition over the next 18 months, which – in these difficult times – is running at record levels; and the wind-down over time of the approximately 1,200 dealers we notified on May 15th, plus an additional 200 dealers who also received wind-down agreements last week. And I hasten to point out that, even with these cutbacks, GM will still have the biggest, most extensive dealer network in the country – more than any of our competitors, including Toyota, Honda, Nissan, Ford or Chrysler.”

So the number looks like 1350 GM closing core brands plus 850 non core brands plus 1280 closing due to attrition (dealer self imposed and running at 80/month).

Even so closing 1350 is still, if divided by 200 metro areas, less than 7.

Would be good to see how many are actually metro vs rural.

AGAIN, just saying GM is not closing dealers to save on warranty work. Sure a closed store may reduce a LITTLE warranty due to inconvenience but not the reason to close stores.

What zipcode is the dealer in and what is the name of it?

Perhaps some customers will be inconvenienced and not make the trip in some areas but popppycock if that is the reason they are closing dealerships.

In your case sited we have a dealer with an out of date store that sold only 5 cars a month that needed a lot of work. I would compare that to a 50 year old McDonalds that needed a complete rehab due to age and sold only 10 big macs a day. Losing money and making McDonalds look bad. Sorry but there is a reason there is not a McDonalds in every little city in the midwest. Sure McDonalds does not lose the money because these are independent franchises but they still do not do it.

L.M.F.A.O!

I think once the data driven metrics used to shut the GM dealers comes out the government will have to shut up. Then again I doubt they will. Interesting though is that NADA, the group that represents all the dealers is not putting up a big fuss. They and all the dealers know this is the right thing to do.

GM will be making a small profit in 4th qtr IF sales stay above 10.5 million and they keep increasing their market share or hold it above 20%. Once GM starts making profits GM shares will sell like hotcakes.

As for small town service needs, what if people open small independent repair shops like we had in the old days! Wow, there’s a concept. Get rid of the Wal-mart car servicing environment replaced by small, private, shops that customers can feel like they know who’s fixing their stuff and know that the mechanics are trained in what they are doing, not just trained to make money.

There are about 1400 Cadillac dealers (compared to 350 mercedes and 250 Lexus)

Seems like 500 dealers being closed out of (7400 GM total-850) 6600 does not sound like very many when Toyota has 1450.

And if we assume there are 200 metropolitan cities in the country that is only about 2 closing per area. Heck there are 22 buick/GMC dealers within 25 miles of my home and 6 within 5 miles. Seems like a bit too many to me.

BUT AGAIN if GM is closing viable dealerships in areas that would not be serviced it should be looked at. GM needs to service the rural areas that the competition does not. This is a competitive advantage.

Dave is right IF GM/Chrysler are closing a lot of small town dealers in the middle of nowhere that service areas that have no other nearby same marque dealers. IF that is the case then yes, look at what they can do to keep them open.

BUT, even Dave said he is not sure of what is really happening. But hell, lets do what we always do here and make things up and go off half cocked with our comments ( or full cocked as the case is here).

Sounds like high school days…pulling out…beachhead…no wonder the auto industry is all phucked up.