by TheOne » Thu Nov 13, 2008 1:00 pm
The national shock and outrage of 9/11 was a distraction, the economy was humming at the time. This is quite different. The economy itself is the problem, The shock and outrage has been directed at the subprime mortgage business which no one saw as a problem when these loans were being made, and the contractors building the homes were buying trucks and escalades.
I'm afraid the answer is not so neat and tidy as a bailout or a tax break. Yes the big three are going to need a bailout, but I believe it ought to come in conjunction with bankruptcy reorganization. The bankruptcy can provide the opportunity to get out from under ridiculous UAW contracts in favor of new more equitable agreements. Done in concert with bailout financing can signal to the American public a sense of creating something positive rather than merely attempting to limit a looming negative economic impact.
As for fixing the problem at the Dealership level it is time for reinvention. Vehicles have become a commodity, and should be viewed as such. they can be purchased anywhere buy anyone at any time, and for all but a few model at triple net. Just as Dealerships reinvented themselves with the advent of F&I products its time to do so again.
Any Dealer not actively and with urgency developing fixed operations into a true profit center is a fool gambling with his business and the families that it supports. Gone are the days that one good weekend event a month can sustain a dealership as a viable on going concern. It has been my experience that all but the smallest of dealerships, or the most ridiculously over built can achieve 100% fixed absorption IF THE DEALER PRINCIPLE IS COMMITTED TO IT, and willing to disregard what he or she "thinks to be true" in favor of changes that give the "back end" the opportunity to become the "front end". Many will disregard this and other warnings in favor of the "hope" that big grosses and full showrooms will return. I look forward to reviewing their resume's in the coming days. Those that have taken a more pragmatic view of what business will look like in the coming days I congratulate you on your foresight and courage to transform your business......