Although I respect your opinion in many regards I don't agree with you.
However on a lighter note my complements to the finesse you used while delivering the slap.....
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Richard
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I'm of the mind it's not really Ford that will fill the vacuum left by 800 Chrysler, and over 1,100 GM dealers. VW/Audi is growing worldwide. Hyundai/Kia is making strides, especially with their customer assistance programs during these troubled times. Penske could buy Saturn. Smart is making some inroads as well. I'll agree that not every single empty GM/Chrysler dealership will see another brand in there anytime soon. But 10 yrs from now...will there be too many car dealerships again?
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calgm988
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Theone
I'm not sure I understand your comment about "dealers slapping Manufactures with lawsuits" has anything to do with being blackballed by Chrysler?
You seem to be forgetting this is about the manufacture - which has been poorly run mind you...is closing points at their own discretion. Shouldn't that be challenged? If your life savings and investment was being taken away from you as in the comments by "gully" wouldn't you be putting together a lawsuit?
Look, I agree with natural attrition. If a dealer is a poor dealer and the performance is below market share penetration requirements than there should be consequences. BUT, the customer will decide that NOT government. Those poor performing dealers should close. IF they can't change - won't change than the customer will speak loudly!
Chrysler/GM building customers for life???? Since when? Gaining control of the retail market by forced closures is not an affective way of eliminating the weak. I'm not a GM or Chrysler dealer but I do care that my fellow dealer has been the victom of poor product planning, hideous marketing strategies, bad training and ineffective mangement.
On this one - I agree with Jazdale!
I'm not sure I understand your comment about "dealers slapping Manufactures with lawsuits" has anything to do with being blackballed by Chrysler?
You seem to be forgetting this is about the manufacture - which has been poorly run mind you...is closing points at their own discretion. Shouldn't that be challenged? If your life savings and investment was being taken away from you as in the comments by "gully" wouldn't you be putting together a lawsuit?
Look, I agree with natural attrition. If a dealer is a poor dealer and the performance is below market share penetration requirements than there should be consequences. BUT, the customer will decide that NOT government. Those poor performing dealers should close. IF they can't change - won't change than the customer will speak loudly!
Chrysler/GM building customers for life???? Since when? Gaining control of the retail market by forced closures is not an affective way of eliminating the weak. I'm not a GM or Chrysler dealer but I do care that my fellow dealer has been the victom of poor product planning, hideous marketing strategies, bad training and ineffective mangement.
On this one - I agree with Jazdale!
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jimmuntz
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This might add something to the discussion-
http://www.nytimes.com/2009/05/23/busin ... f=business
(cut and paste into your browser to read- a New York Times article from 5/23/09)
http://www.nytimes.com/2009/05/23/busin ... f=business
(cut and paste into your browser to read- a New York Times article from 5/23/09)
[This message has been edited by jimmuntz (edited 05-23-2009).]
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jimmuntz
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The One/Darin-
Actually "The One" has been coopted by our President. I can't write that as a greeting without seeing his ears and smile.
In any event, this refers to your post above in which you said...
"Jim the cost savings is not in infrastructure to support the dealers.
It is:
Reduced inventories at the wholesale level.
Reduced inventories at the retail level.
Increased perceptive value in the product.
Reduced incentives.
Reduced rebates.
Better retail process control."
One at a time:
"Reduced inventories at the wholesale level."
What we see is many consolidations that look like a simple consolidation of the three Chrysler brands under one rooftop. The dealers slated for termination the loser, the survivor the winner. I'm not sure how that will reduce wholesale inventories at the wholesalel level. If they do reduce a dealer point covering all three bands that might apply. But with our review of the list those are limited. Most look like consolidations with veryone ending up under one roof.
"Reduced inventories at the retail level."
Same argument- if the bulk of the closures only result in Chrysler brand consolidations then the reduction in retail inventories appear to be minimal.
"Increased perceptive value in the product."
I'm not sure what that means. Larger more-capitalized dealers are better for everyone, except the guy who loses. So I can buy this as an long-term advantage. However, it will not pay in the short-run as customers are abandoned and lost to other dealers and makes. Some customers won't like the guy down the street.
"Reduced incentives.
Reduced rebates."
But together these are functionally the same. I don't see it. Why?
"Better retail process control."
Again, I'm not sure what you are getting at. Will there be less competition? Only if our assumption that the majority of the announced Chrysler closings have more to do with aligning the brands under one roof is wrong. If the Jeep dealership is just moving down the street to the Chrysler Dodge store, then we don't see any difference in the retail process or its control - but again, I'm not sure what you mean.
[This message has been edited by jimmuntz (edited 05-23-2009).]
Actually "The One" has been coopted by our President. I can't write that as a greeting without seeing his ears and smile.
In any event, this refers to your post above in which you said...
"Jim the cost savings is not in infrastructure to support the dealers.
It is:
Reduced inventories at the wholesale level.
Reduced inventories at the retail level.
Increased perceptive value in the product.
Reduced incentives.
Reduced rebates.
Better retail process control."
One at a time:
"Reduced inventories at the wholesale level."
What we see is many consolidations that look like a simple consolidation of the three Chrysler brands under one rooftop. The dealers slated for termination the loser, the survivor the winner. I'm not sure how that will reduce wholesale inventories at the wholesalel level. If they do reduce a dealer point covering all three bands that might apply. But with our review of the list those are limited. Most look like consolidations with veryone ending up under one roof.
"Reduced inventories at the retail level."
Same argument- if the bulk of the closures only result in Chrysler brand consolidations then the reduction in retail inventories appear to be minimal.
"Increased perceptive value in the product."
I'm not sure what that means. Larger more-capitalized dealers are better for everyone, except the guy who loses. So I can buy this as an long-term advantage. However, it will not pay in the short-run as customers are abandoned and lost to other dealers and makes. Some customers won't like the guy down the street.
"Reduced incentives.
Reduced rebates."
But together these are functionally the same. I don't see it. Why?
"Better retail process control."
Again, I'm not sure what you are getting at. Will there be less competition? Only if our assumption that the majority of the announced Chrysler closings have more to do with aligning the brands under one roof is wrong. If the Jeep dealership is just moving down the street to the Chrysler Dodge store, then we don't see any difference in the retail process or its control - but again, I'm not sure what you mean.
[This message has been edited by jimmuntz (edited 05-23-2009).]
[This message has been edited by jimmuntz (edited 05-25-2009).]
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franks283
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great post, Jim, as usual. I feel the need to add something however, and that is this. I do the grunt work. I shuttle drive, deliver parts occasionally, I do all that stuff. I cashier. What customers are saying is simple. Wow, such and such down the street is closing. Things must be real bad. Are you guys gonna be okay. Closing dealerships is exactly that...winners and losers. Attrition should factor into these dealers closing, not some guy in Washington. Not some corporate type at GM. At the end of the day, closing dealerships hurts the economy. It increases unemployment.
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cantfind12
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This is alot more complicated than meets the eye. There are liablity costs that are not readily apparent. For example, a doctor who has a private practice is responsible for "himself" whowever, when he is credentialed by a medical group of hospital that group is now held to a whole or partial legal assumption. When you attach someone else's name to your business you pick up that cost as do they.
Additionally, to appease the market when times were good manufacturers saturated (at request) the AOR (areas of responsibility). exploited demographics, much like the housing market did.
Two items out of probably hundreds. Its complicated but the misfortune is that the people who have laid all the rails never get to ride the train. Nothing New unfortunately.
Additionally, to appease the market when times were good manufacturers saturated (at request) the AOR (areas of responsibility). exploited demographics, much like the housing market did.
Two items out of probably hundreds. Its complicated but the misfortune is that the people who have laid all the rails never get to ride the train. Nothing New unfortunately.
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TheOne
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There is an article on freep.com, and a link in the reader comments that spells out fairly well the cost savings of dealer consolidation.
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TheOne
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Seems to bolster your arguement.....
The latter part of Thursday's hearing focused on the decision to close 789 dealerships. Nardelli struggled to pinpoint how much the closings would save the company and said bankruptcy presented an opportunity to bring forward a long-term plan to trim the number of dealerships.
The latter part of Thursday's hearing focused on the decision to close 789 dealerships. Nardelli struggled to pinpoint how much the closings would save the company and said bankruptcy presented an opportunity to bring forward a long-term plan to trim the number of dealerships.