Change we can beleive in

[tony]

If McDonalds stops supplying their franchises with Big Macs due to the fact that the McDonalds corporation is losing money on every big mac sold that is simply restructuring which is what GM and Chrysler are doing.. sorry, thats capitalism.

You know whats funny about that letter? Because I know this whole thing started with someone listening to Hannity or Boortz (Heard it on Boortz myself before reading it here) the first line;

On Thursday, May 14, 2009 I was notified that my Dodge franchise, that we purchased, will be taken away from my family

If that was an employee writing about their job Boortz would have said it wasn't your job in the first place and that people have this false sense of entitlement. Well you know what? Those cars belong to Chrysler.. not the franchisee. Do you think each individual McDonalds owns the big mac or the McDonalds corporation? Chrysler is restructuring because their business is not profitable, the guy was going to lose the Chrysler products one way or another.. with or without the current administration.

And again I reiterate, Chrysler didn't crumble in a matter of months, this has been years in the making. A lot of you need to go back and take fundamental economics. The free market doesn't always mean successful business.

[tony]

Read further as to what a franchisee is entitled to;

The United States Office of Advocacy of the SBA indicates that a franchisee "is merely a temporary business investment where he may be one of several investors during the lifetime of the franchise. In other words, he is "renting or leasing" the opportunity, not "buying a business for the purpose of true ownership."

Additionally, "A franchise purchase consists of both intrinsic value and time value. A franchise is a wasting asset due to the finite term: the franchisor is only obliged to renew the franchise if it chooses to contract for that obligation."

In other words, it wasn't his to begin with. Sorry to break it to you like that, these are the risks that are taken when you sign certain contracts. /thread

[BanginJimmy]

I have already posted several links that pointed out how much Obama has had to do with this, yet you just ignore them. No one said Obama picked this exact dealership to close, but he is the one pulling the strings.


Still no one has answered why Chrysler shutting down a profitable franchise though. It simply makes no sense as it costs the Chrysler Corp no money to grant a franchise. Market saturation obviously isnt a problem either, as this one dealership was profitable.

BTW, did a little asking around, 1 reason many dealerships keep their inventory on credit is for insurance purposes. Another reason is for tax purposes. Since the vehicles are on credit they are not considered assets and can more easily be moved if a dealership closes down.

[joecoolfreak]

I have already posted several links that pointed out how much Obama has had to do with this, yet you just ignore them. No one said Obama picked this exact dealership to close, but he is the one pulling the strings.


Still no one has answered why Chrysler shutting down a profitable franchise though. It simply makes no sense as it costs the Chrysler Corp no money to grant a franchise. Market saturation obviously isnt a problem either, as this one dealership was profitable.

BTW, did a little asking around, 1 reason many dealerships keep their inventory on credit is for insurance purposes. Another reason is for tax purposes. Since the vehicles are on credit they are not considered assets and can more easily be moved if a dealership closes down.

It's very simple. To answer your question, this is why Chrysler has chosen to do so: http://www.detnews.com/article/20090...its-franchises

Landry said dealers were evaluated based on their sales, share, shipments, customer satisfaction scores, facility, location, whether they sell all three brands and if they operate with a competitor, which is the case for 44 percent of the rejected dealers.

Landry said 83 percent of the rejected dealers sell more used cars than new vehicles and should be able to remain in business as used car dealers.

The guy that has this dealership says he is "profitable" obviously has a different outlook than Chrysler does. I still agree with you that Obama has his hands in the pot, but I have yet to see any source even hint that this decision ( to cut dealers) had anything to do with him.


What you haven't shown or explained is why you think Obama or anyone else would decide to close down profitable dealerships. If there is no good explanation, what is the motivation? Are you suggesting that Obama is just sabotaging small business because it's fun? Or is it that he wants Chrysler to fail even more? What exactly is the motivation behind what you feel is such a poor fiscal decision?

[preferredduck]

Since you still don't get it, the only thing that was taken away was his franchise. That is simply a contract with Chrysler that allows him to sell their product under their name. All he lost was his contract. No one took his money, his inventory, his building, or his land. He still has all of those. That being said, Obama had NOTHING to do with that. That happened because Chrysler filed for bankruptcy. Stop blaming Obama for the fact that this guy is a poor businessman. I will again ask: what is it you would have liked to happen in this case?


Hmm, I was simply remarking that 80% of what you post is unintelligable because you can't form complete sentances in english. I seriously have a difficult time deciphering half of what you write because you don't even attempt to capitalize letters or finish your thoughts in complete sentance structure. I don't claim to spell correctly or have perfect grammer, but I do attempt to write in correct english so that other people can understand what I am saying. It would be the same if you just mumbled for a while, as we don't know what you mean. If you doubt me, look back at some of your posts and read them back out loud.



This would be where Tony's question comes into to play. There is no fact here. Obama doesn't own any part of chrysler. You also failed to provide any evidence as Tony asked.



Ok, you may not feel sorry for people who lost their homes to ARM and neither do I. It was their fault, not the governement's. Now if you are saying that I can blame the governement for derregulating the mortgage industry, doesn't that mean you are for more regulation (more government intervention)?



What is the relevance of this? Does the government do things on credit? Sure. Does that mean people can buy everything they want on credit and not have to pay it back? I don't get your point at all here. The simple fact is that the owner of the dealership got what was coming to him and I don't feel sorry for him at all.

I will ask a final time, What do you think should have happened? When Chrysler filed for bankruptcy, what do you think is the proper course of action as it applies to this dealership in question?

here let me break it down for you so im not mumbling

1.wow so what i dont capitalize, usually im on and off here in a hurry, like tonight. And yes i do get it. I have worked in several dealers and ran a mack truck outfit. Read into exactly what the man is losing and you will understand. Have you ever dealt with auto warranty, parts supply, etc. Also last time i checked with chrysler filing for bankrupty dealers are supposed to honor warranties and service agreements, which in this case if the guy's "franchise" is gone then he cannot do that. also he cannot sell his inventory as a "new" car b/c the franchise is gone, so deduct used value which as you know the biggest hit is when you buy a new car and there you have it. it's pretty black and white in the article.

2. don't think the gov't has a stake in GM, wrong read this.
http://online.wsj.com/article/BT-CO-...26-714684.html

put that in your pipe and smoke it.

3. regulation on idiotic loan ideas(like ARM's) should have been nipped in the butt. i prefer less gov't, but when someone makes large sums of $$ on shitty loans and 50% of the time they lied to the client and put them in an arm without knowing is bad. but what most consumers don't know is you can walk away from the closing table. and don't say this did not happen i can give you several examples of bait and switch.

4. you mentioned the guy owed a lot of $$ and you do not feel sorry for him losing his business, what i pointed out is, what's our national debt again.

hang on i'll quote you--What is the relevance of this? Does the government do things on credit? Sure. Does that mean people can buy everything they want on credit and not have to pay it back? I don't get your point at all here. The simple fact is that the owner of the dealership got what was coming to him and I don't feel sorry for him at all.----

well the point is chrysler borrowed a bunch of our taxpayer $$ that we did not have to begin with and is not liable at paying it back. hey let's throw $$ at AIG, BANKS, you name it lets borrow borrow borrow till china says no more bond buying. it's the pot calling the kettle black.


5. lastly i do not think the man should have his dealership taken away and given to somebody else. period. think of it as starting your own company one day being kicked out by the board commitee. chrysler should file BK like everyone else, restructure and PAY BACK THE TAX $$ GIVEN TO THEM. watch for an assembly plant in south america for this brand soon.

[preferredduck]

If McDonalds stops supplying their franchises with Big Macs due to the fact that the McDonalds corporation is losing money on every big mac sold that is simply restructuring which is what GM and Chrysler are doing.. sorry, thats capitalism.

You know whats funny about that letter? Because I know this whole thing started with someone listening to Hannity or Boortz (Heard it on Boortz myself before reading it here) the first line;



If that was an employee writing about their job Boortz would have said it wasn't your job in the first place and that people have this false sense of entitlement. Well you know what? Those cars belong to Chrysler.. not the franchisee. Do you think each individual McDonalds owns the big mac or the McDonalds corporation? Chrysler is restructuring because their business is not profitable, the guy was going to lose the Chrysler products one way or another.. with or without the current administration.

And again I reiterate, Chrysler didn't crumble in a matter of months, this has been years in the making. A lot of you need to go back and take fundamental economics. The free market doesn't always mean successful business.

sadly this brand has been tanking for years. at least the last 15yrs or so.

[joecoolfreak]

here let me break it down for you so im not mumbling

1.wow so what i dont capitalize, usually im on and off here in a hurry, like tonight. And yes i do get it. I have worked in several dealers and ran a mack truck outfit. Read into exactly what the man is losing and you will understand. Have you ever dealt with auto warranty, parts supply, etc. Also last time i checked with chrysler filing for bankrupty dealers are supposed to honor warranties and service agreements, which in this case if the guy's "franchise" is gone then he cannot do that. also he cannot sell his inventory as a "new" car b/c the franchise is gone, so deduct used value which as you know the biggest hit is when you buy a new car and there you have it. it's pretty black and white in the article.

I have dealt with all of those, so I do understand. Correct, he cannot honor warranties. He is not a chrysler dealer anymore. He rented the ability to call himself that and can't anymore. His inventory is worth less, yes, that is the point. He knew the risk and gambled. He lost and was wrong. That's the way life goes. You are not entitled to a successful business and he didn't earn it.

2. don't think the gov't has a stake in GM, wrong read this.
http://online.wsj.com/article/BT-CO-...26-714684.html

put that in your pipe and smoke it.

Where did GM come into this? We are talking about Chrysler. You do know the difference right? YOU stated that Obama owned 80% of Chrysler. Now backup that smoke. =-)

3. regulation on idiotic loan ideas(like ARM's) should have been nipped in the butt. i prefer less gov't, but when someone makes large sums of $$ on shitty loans and 50% of the time they lied to the client and put them in an arm without knowing is bad. but what most consumers don't know is you can walk away from the closing table. and don't say this did not happen i can give you several examples of bait and switch.

Every consumer knows that you have a right to walk away from the table. Every consumer knows that they should read the contract before signing. Any customer that doesn't know those two things, deserves to be screwed for doing it without supervision from a smarter person. No one signed an ARM without knowing about it. They just all thought that they were getting a deal that was too good to be true and guess what, it was. Still no sympathy. You prefer less government, but more regulation on personal stupidity. I am not followint the logic.

4. you mentioned the guy owed a lot of $$ and you do not feel sorry for him losing his business, what i pointed out is, what's our national debt again.

Again, what is the point? I am aware that we have a national debt. I still don't see it's relevance. I have a credit card too? Should this be a point in my arguement? He lost his business because he is a bad businessman. That simple. Get it yet?

hang on i'll quote you--What is the relevance of this? Does the government do things on credit? Sure. Does that mean people can buy everything they want on credit and not have to pay it back? I don't get your point at all here. The simple fact is that the owner of the dealership got what was coming to him and I don't feel sorry for him at all.----

well the point is chrysler borrowed a bunch of our taxpayer $$ that we did not have to begin with and is not liable at paying it back. hey let's throw $$ at AIG, BANKS, you name it lets borrow borrow borrow till china says no more bond buying. it's the pot calling the kettle black.

Again, not sure where a point might be found here. What pot is calling what kettle here?

5. lastly i do not think the man should have his dealership taken away and given to somebody else. period. think of it as starting your own company one day being kicked out by the board commitee. chrysler should file BK like everyone else, restructure and PAY BACK THE TAX $$ GIVEN TO THEM. watch for an assembly plant in south america for this brand soon.

His dealership isn't being taken away for the last time. His contract with Chrysler ( who doesn't have to honor ANY contracts ) is being disolved. Since you still haven't figured this out ( See Tony's last few posts ), he signed a contract that allowed him to borrow the Chrysler name and privilages. There isn't any ownership here. When Chrysler files for bankrupcy, their contracts are voided. They restructure (offer some of the dealerships back the contract, but only a few select profitable ones so they don't continue losing money) like they did. What you describe as what should happen, is happening. Please explain what part of the process should ensure this guy gets a new contract with Chrysler and how that wouldn't be more government involvement?

[preferredduck]

Where did GM come into this? We are talking about Chrysler. You do know the difference right? YOU stated that Obama owned 80% of Chrysler. Now backup that smoke. =-)

do a little research on the investment comany that owns chrysler and you will also see they have a stake in GM, GMAC financing, which includes cars, mortages, etc. I saw tony's post about the franchise and contracts that had to have been signed. there is no safe bet on any business venture but doesn't a franchise cost a chunk of change, and wouldn't that make almost every dealer out there a franchise.

Every consumer knows that you have a right to walk away from the table. Every consumer knows that they should read the contract before signing. Any customer that doesn't know those two things, deserves to be screwed for doing it without supervision from a smarter person. No one signed an ARM without knowing about it. They just all thought that they were getting a deal that was too good to be true and guess what, it was. Still no sympathy. You prefer less government, but more regulation on personal stupidity. I am not followint the logic.

i don't think there should be regulation on personal stupidity, but making it harder for someone to become a loan officer would be a good start, i mean you are in complete control of someone's future and YOU determine your comission. Once you get some people's trust they may not check to see if the good faith estimate matches what is at closing, or the many cases of fraud popping up there was alot of foul play involved. did you know the Ex-CEO of countrywide,"the leader in subprime BS" now has a company that makes tons of money off the mess that he caused.

4. you mentioned the guy owed a lot of $$ and you do not feel sorry for him losing his business, what i pointed out is, what's our national debt again.


Again, what is the point? I am aware that we have a national debt. I still don't see it's relevance. I have a credit card too? Should this be a point in my arguement? He lost his business because he is a bad businessman. That simple. Get it yet?

hang on i'll quote you--What is the relevance of this? Does the government do things on credit? Sure. Does that mean people can buy everything they want on credit and not have to pay it back? I don't get your point at all here. The simple fact is that the owner of the dealership got what was coming to him and I don't feel sorry for him at all.----.

the point is you stated earlier you DO NOT FEEL SORRY FOR SOMEONE OVEREXTENDING THEMSELVES AND LOSING EVERYTHING, whether it be personal or business and i am stating the fact that our WHOLE COUNTRY AND GOV'T is over extended on credit and the people, yes you and me have to pay back the debt, unless we just say "hey we don't wanna pay anymore". read up on the federal reserve, it's the whole system, not just a homeowner and a guy who lost his career b/c of poor management.

so the moral of the story is you call him a bad businessman. well i call the crooks at the top bad businessmen. if i sank my whole life into something and could possibly loose everything i own for a company i would be pretty pissed. example i worked for a company that had to do some door to door debt collections, and let's just say when i had to shell out more $$ on gas for the company than i was getting paid i jumped ship. just because this guy may not have been selling many cars does not mean he was not making profit. the service dept. and parts is the bread nad butter at a dealer.

one more point, if the taxpayers(dealer owner) bailed out these companies with trillions of dollars then why should the people paying back the debt get screwed. if i were him i would never want to pay taxes again, and after watching company fail after fail some of which were helped i would not want to pay taxes either and if i ever can i will stop doing so.

[joecoolfreak]

Ok, you are still missing the point. This discussion is very simple. Should the owner of the dealership be pissed? Sure, he should be pissed at himself. His demise is a direct result of the free market or pure capitalism. Was he profitiable? Maybe. Did that profit come from fixing crappy cars that he sold? Most likely. Did that money he was making also make money for Chrysler? Nope, it was a drain on them. Did they go out of business because of it? Sure. Does that mean he loses his contract with them that he paid a lot of money for? Yup. Is that fair? Nope. Is that capitalism? Absolutely.

The free market is not fair. Just because you make money, doesn't mean you get to stay in business. Capitalism at it's purest is pretty damn rough. I find it funny as hell that all of you "conservatives" scream free market until YOU suddenly head for more government regulation or intervention when you see the results.

Duck....stop getting hung up on credit and debt. It is irrelevant to the conversation. That is a whole other bag of worms. That being said, there is no option not to pay our national debt or stop paying taxes. We as a country acquired that debt whether you like it or not, and our government and it's people can't handle what happens when the government has do default or file for bankruptcy. I have personally seen and lived what it is like to be in a third world country and we just can't handle that as a people right now.

[preferredduck]

Ok, you are still missing the point. This discussion is very simple. Should the owner of the dealership be pissed? Sure, he should be pissed at himself. His demise is a direct result of the free market or pure capitalism. Was he profitiable? Maybe. Did that profit come from fixing crappy cars that he sold? Most likely. Did that money he was making also make money for Chrysler? Nope, it was a drain on them. Did they go out of business because of it? Sure. Does that mean he loses his contract with them that he paid a lot of money for? Yup. Is that fair? Nope. Is that capitalism? Absolutely.

The free market is not fair. Just because you make money, doesn't mean you get to stay in business. Capitalism at it's purest is pretty damn rough. I find it funny as hell that all of you "conservatives" scream free market until YOU suddenly head for more government regulation or intervention when you see the results.

Duck....stop getting hung up on credit and debt. It is irrelevant to the conversation. That is a whole other bag of worms. That being said, there is no option not to pay our national debt or stop paying taxes. We as a country acquired that debt whether you like it or not, and our government and it's people can't handle what happens when the government has do default or file for bankruptcy. I have personally seen and lived what it is like to be in a third world country and we just can't handle that as a people right now.

1st i am not conservative, check my other threads. 2nd how does chrysler lose $ on a car dealership, rebates maybe but i doubt it. 3rd credit and debt have alot to do with this whole economic mess, and even this man's inventory is on credit like all other dealers. and 4th what third world country did you live in? i'm very curious.

you are right the people in this country would not know what to do if the gov't went BK. just think those poor little 24 yr and younger females in LA that would freak out b/c paris is no longer on the tv and the power is out and they have to poop in the yard. it's gonna happen soon b/c mr obama is following FDR's roadmap to success, and if you do some reasearch you will find FDR's plan failed, it was WW2 that brought us back.

[tony]

1st i am not conservative, check my other threads. 2nd how does chrysler lose $ on a car dealership, rebates maybe but i doubt it.

They lose money on the product not the dealership. If the cost of the production on the 300c is costing the company it doesn't matter how much the dealership is making. Production gets cut and distribution is consolidated (i.e, close dealerships)

[Total_Blender]

No sympathy for this guy. He should have known the risks associated with the franchise system.

He should have seen the serious lack of r&d that happened to Chrysler after the Daimler takeover, combined with the fact that Chrysler products required major factory incentives for people to buy them, and decided to sell a product people actually want.

No where in his letter does it say that the cars he sells won't have warranty coverage. It just says that his facility cannot perform warranty service. So people could buy from him and get service from other dealers in the area. Since these are new and untitled vehicles, the manufacturer is bound to he warranty wherever they are sold.

He could sell the vehicles at cost to other dealers in the area, or even auction them off if it came down to it.

He will be keeping his real estate, his facilities, and his staff. and he still has an Isuzu franchise. while Isuzu is not a particularly profitable franchise to have, it might pay his light bill.

And many people go to the dealers for service and maintainence after their warranties expire. They are not taking his tech's knowledge or their tools. So he still has a repair business as well.

The bottom line here is that this guy is going to stay in business, just not the Chrysler business. He will probably be selling Korean automobiles a year from now with no harm done.

[BanginJimmy]

No sympathy for this guy. He should have known the risks associated with the franchise system.

He should have seen the serious lack of r&d that happened to Chrysler after the Daimler takeover, combined with the fact that Chrysler products required major factory incentives for people to buy them, and decided to sell a product people actually want.

I agree with all of this. During the 80's all American manufacturers fell into this same trap and it is taking a VERY long time to recover from it. I do think the newer lines of Dodge sports cars and the Ram are enough to pull them through though.

No where in his letter does it say that the cars he sells won't have warranty coverage. It just says that his facility cannot perform warranty service.

He is also losing the money on his parts supply that Chrysler required him to keep on hand.

So people could buy from him and get service from other dealers in the area. Since these are new and untitled vehicles, the manufacturer is bound to he warranty wherever they are sold.

Wrong, as soon as his franchise contract ends, any vehicle on his lot cannot be sold as new, whether they are or not. This means they will immediately suffer the depreciation of a "used" car. It is also up to Chrysler if they want to service them as new cars. They are not required to service vehicles purchased from an unaffiliated dealership. 3 years, 36k miles only applies to authorized dealer sales.

He could sell the vehicles at cost to other dealers in the area, or even auction them off if it came down to it.

He will be keeping his real estate, his facilities, and his staff. and he still has an Isuzu franchise. while Isuzu is not a particularly profitable franchise to have, it might pay his light bill.

All true, but he could realistically take a HUGE hit selling the cars on the lot.

And many people go to the dealers for service and maintainence after their warranties expire. They are not taking his tech's knowledge or their tools. So he still has a repair business as well.

Considering the fact that he does have all of the factory manuals and factory trained people he might even be able to steal non-warranty repair business from dealerships. Then again, he wont be able to make any money on it because he will not get dealer prices on parts.

The bottom line here is that this guy is going to stay in business, just not the Chrysler business. He will probably be selling Korean automobiles a year from now with no harm done.

probably a good possibility as the article describes him as someone the community trusts. He may be able to keep some of his old customers with a new sign on the window.





I will mention that most of the people that are OK with this, would be blowing their top if Bush was the one in the oval orifice when this went down. Most of you will simply agree with anything Obama does just because he is Obama.

[preferredduck]

No sympathy for this guy. He should have known the risks associated with the franchise system.

He should have seen the serious lack of r&d that happened to Chrysler after the Daimler takeover, combined with the fact that Chrysler products required major factory incentives for people to buy them, and decided to sell a product people actually want.

No where in his letter does it say that the cars he sells won't have warranty coverage. It just says that his facility cannot perform warranty service. So people could buy from him and get service from other dealers in the area. Since these are new and untitled vehicles, the manufacturer is bound to he warranty wherever they are sold.

He could sell the vehicles at cost to other dealers in the area, or even auction them off if it came down to it.

He will be keeping his real estate, his facilities, and his staff. and he still has an Isuzu franchise. while Isuzu is not a particularly profitable franchise to have, it might pay his light bill.

And many people go to the dealers for service and maintainence after their warranties expire. They are not taking his tech's knowledge or their tools. So he still has a repair business as well.

The bottom line here is that this guy is going to stay in business, just not the Chrysler business. He will probably be selling Korean automobiles a year from now with no harm done.

considering chrysler said "hey remodel your building" required a massive loan to be taken out at suntrust bank, he will prob not own the land or building much longer.

it will be a commercial foreclosure, and that has just begun. wait til it reaches the level of the housing market then we are screwed. if you don't think this will happen, look around at all the retail space available at the moment, it's going to get worse b/c who can afford to start a business since 80% of americans lost half of their money in their 401k's etc.

[Vteckidd]

my .02

1) Chrysler as a whole has NOT been profitable. Anyone owning a Chrysler Franchise has known for a long time, the company, as a whole, is not doing well and has not done well for A LONG TIM.

2) If the Main company isnt doing well, it is still possible for SMALLER franchises/dealers to do well/profit. Look at Starbucks. There were 5000 stores nationwide 3 years ago, now they are drawing down to somewhere half that number because they overexpanded. People PAID for those franchises, and im sure they are losing them now even if they are profitable.

3) If the MAIN company goes out of business, then your franchise is still worth nothing, so you are kinda doomed either way. Lets say this guy gets to keep the Franchise, and Chrysler goes under anyway, awesome, your inventory is worth even less now an you are right back where you started.

4) If he did major renovations in the last 2 years or sooner, he was an idiot. the car companies have been way out of money for A LONG TIME. Why put money into a dieing breed? I mean i understand HE was profitable, but that means jack shit if the parent company is going down.

5) Franchise people know the risks when they buy in. You can be making a million dollars a day, but if the parent company is losing 2million a day, you are not going to survive, PERIOD. Thats the risk.


The only thing i do not like about this, is that Obama is LETTING chrysler take this guys franchise rights away and give them to someone else "cost free". That is not right. Some sort of compensation should be paid at the minimum. But the problem is Chrysler is broke, so.............

Something else isnt making sense, i highly doubt chrysler is going to stick him with $3,000,000 in inventory and move on and say sorry. I am willing to bet money that the "new franchise" owner will prob end up buying this guys inventory in some form or fashion. Im sure there is more to this story that is not being revealed.

If Obama sits back and lets Chrysler stick it to this guy in those terms, then hes majorly fucked up a small business. You cant penalize a guy for doing well.

The FRANCHISE risks are ASSUMED by everyone, but the Govt should not have a hand in "who stays and who goes".

But to be honest, its all garbage and wrong cause we are in bed with the auto makers whether you like it or not. No turning back now.

[preferredduck]

my .02

1) Chrysler as a whole has NOT been profitable. Anyone owning a Chrysler Franchise has known for a long time, the company, as a whole, is not doing well and has not done well for A LONG TIM.

2) If the Main company isnt doing well, it is still possible for SMALLER franchises/dealers to do well/profit. Look at Starbucks. There were 5000 stores nationwide 3 years ago, now they are drawing down to somewhere half that number because they overexpanded. People PAID for those franchises, and im sure they are losing them now even if they are profitable.

3) If the MAIN company goes out of business, then your franchise is still worth nothing, so you are kinda doomed either way. Lets say this guy gets to keep the Franchise, and Chrysler goes under anyway, awesome, your inventory is worth even less now an you are right back where you started.

4) If he did major renovations in the last 2 years or sooner, he was an idiot. the car companies have been way out of money for A LONG TIME. Why put money into a dieing breed? I mean i understand HE was profitable, but that means jack shit if the parent company is going down.

5) Franchise people know the risks when they buy in. You can be making a million dollars a day, but if the parent company is losing 2million a day, you are not going to survive, PERIOD. Thats the risk.


The only thing i do not like about this, is that Obama is LETTING chrysler take this guys franchise rights away and give them to someone else "cost free". That is not right. Some sort of compensation should be paid at the minimum. But the problem is Chrysler is broke, so.............

Something else isnt making sense, i highly doubt chrysler is going to stick him with $3,000,000 in inventory and move on and say sorry. I am willing to bet money that the "new franchise" owner will prob end up buying this guys inventory in some form or fashion. Im sure there is more to this story that is not being revealed.

If Obama sits back and lets Chrysler stick it to this guy in those terms, then hes majorly fucked up a small business. You cant penalize a guy for doing well.

The FRANCHISE risks are ASSUMED by everyone, but the Govt should not have a hand in "who stays and who goes".

But to be honest, its all garbage and wrong cause we are in bed with the auto makers whether you like it or not. No turning back now.

amen for pointing out the fact that someone else is getting the franchise for free, it's prob one of obama's friends. lol. most dealers, including ford went on remodeling sprees back in 02-03 so he prob didn't do it recently. but i can say it costs a lot of $$ to remodel, i ran this guys service dept when he remolded for mack trucks
http://www.gainesvilletruckcenter.ne...d=15&Itemid=30

that is just the parts room

his inventory will prob go to the new owner at little to no cost to the new owner.

service is where the $$ is. even at the mack truck dealer we sold more parts than nextran which has 20 dealers combined and we made most of our money in the service dept. only time we lost $ was excessive labor on warranty jobs and that was due to a crowded shop counter in the mornings while they were trying to get the deliveries out.

but as you pointed out chrysler is broke and has been heading for disaster for a long time so the only thing this guy can really do is service/warranty work.

seriously everyone look into the company who owns chrysler and see how much af a stake they have in GM and
GMAC financing.

[josh green]

Joecool, your subway comparison is not very good. Food franchise have very little overhead compaired to cars. Food is something that everyone has to have, new cars are not. Food isnt something that you as a consumer more than likely have to finance, nor is it a wear item that requres maintaining. What has killed his business is the fact that Chrysler will not warranty his new cars. He "could" sell them and recoup the loan for his inventory, but what consumer will buy a car that the manufacturer will not warranty in any way? Hardly any dealership actually "own" the cars that they sell. Not to mention the parts that he has in house that may or may not be paid for that are now almost worthless. His dealership not being able to do warranty work on new cars means that the consumer would have to pay out of pocket for any work/parts needed.
His renovation was required by Chrysler to maintain a dealer, this isnt uncommon it has happened to 3 dealerships here where I live (honda, Toyota, Nissan). His debt for the renovation was so that he could maintain being a profitable business. This really sucks for the guy, especially since the Dodge, Chrysler, Jeep dealership here is remaining open and the OWNER of the business made it public that he wished he was one of the ones that was shut down..... This guy is old, has lots of money and is tired of selling cars and hasnt been profitable in the last few years. Where is the logic in that? Why would Chrysler shut down a dealer that was actually doing well (for the owner and Chrysler) and leave open a dealership that is willing to fold and isnt helping Chrysler as a company?

[stillaneon]

1st i am not conservative, check my other threads. 2nd how does chrysler lose $ on a car dealership, rebates maybe but i doubt it. 3rd credit and debt have alot to do with this whole economic mess, and even this man's inventory is on credit like all other dealers. and 4th what third world country did you live in? i'm very curious.

you are right the people in this country would not know what to do if the gov't went BK. just think those poor little 24 yr and younger females in LA that would freak out b/c paris is no longer on the tv and the power is out and they have to poop in the yard. it's gonna happen soon b/c mr obama is following FDR's roadmap to success, and if you do some reasearch you will find FDR's plan failed, it was WW2 that brought us back.

Anytime that you spend more money than you make you loose money

So if you are shelling out money to pay for warranty work, but the dealership isn't selling enough cars to offset that investment, then you loose money.

You spend the money to make cars and ship them, it doesn't behoove you to have them sit on a lot.

[joecoolfreak]

Joecool, your subway comparison is not very good. Food franchise have very little overhead compaired to cars. Food is something that everyone has to have, new cars are not. Food isnt something that you as a consumer more than likely have to finance, nor is it a wear item that requres maintaining.

None of that makes it a bad analogy. He is a bad businessman and deserved to go under. It doesn't matter whether or not the franchise was food or cars. None of those points had anything to do with the comparison I was using.

What has killed his business is the fact that Chrysler will not warranty his new cars. He "could" sell them and recoup the loan for his inventory, but what consumer will buy a car that the manufacturer will not warranty in any way? Hardly any dealership actually "own" the cars that they sell. Not to mention the parts that he has in house that may or may not be paid for that are now almost worthless. His dealership not being able to do warranty work on new cars means that the consumer would have to pay out of pocket for any work/parts needed.

No, what killed his business is the fact that he chose to rely on Chrysler as his business model. That was a bad choice and he is paying the consequence. Simple as that.

His renovation was required by Chrysler to maintain a dealer, this isnt uncommon it has happened to 3 dealerships here where I live (honda, Toyota, Nissan). His debt for the renovation was so that he could maintain being a profitable business.

That would have been a great opportunity for him to ditch a dying product and start selling something profitable with a future. He didn't do that, so he gets what he deserves.

This really sucks for the guy, especially since the Dodge, Chrysler, Jeep dealership here is remaining open and the OWNER of the business made it public that he wished he was one of the ones that was shut down..... This guy is old, has lots of money and is tired of selling cars and hasnt been profitable in the last few years. Where is the logic in that? Why would Chrysler shut down a dealer that was actually doing well (for the owner and Chrysler) and leave open a dealership that is willing to fold and isnt helping Chrysler as a company?

Exactly, why would Chrysler choose to keep a unprofitable dealer open and close a "profitable" one?. They wouldn't. Simple. As I provided in my earlier statements, the article I showed clearly stated why dealerships were losing their contracts. This dealer in question simply isn't telling the whole story.

What everyone seems to be missing here is that the entire process here is simple free market capitalism. IF the dealer in question from the OP statement really was doing well and really was a good businessman, he wouldn't be going bankrupt. He made poor decisions, failed to plan for the future, and didn't diversify. He deserves to lose his business and I don't feel sorry for him. This is capitalism at it's finest, plain and simple. All of you that are crying, have yet to answer one simple question: What should have been done differently? Does Chrysler have the right to void their franchise agreements when they file? Do you want the government to come in and "make" Chrysler keep all "profitible" dealerships? What should have happened in THIS situation?