Car Dealers Reeling From Forced Closures

(CBS)  Greg Signore, who owns Elm Dodge in Kearny, N.J., says he feels backed into a corner. And he's angry.

"We're the road kill in all of this," Signore said.

He's one of nearly 800 Chrysler dealers nationwide given notice they will be closed. On top of that bad news, Chrysler ordered Signore to clear out his show room by June 9, reports CBS News correspondent Michelle Miller.

"After 60 years, they don't give me the decency to have a longer period of time to get rid of my inventory," Signore said.

So, he's slashing prices on all new cars. Take this 2009 Dodge Grand Caravan. It retails at just above $33,000, slightly more than what he paid for it. To get it off the lot, he'll take $25,000.

"You will lose?" Miller asked.

"I will lose $7,000 on the car," Signore said.

Today, sensing blood, some customers were pushing for even more.

But for Chrysler dealers like this one, this weekend is more than just a gimmick or a three-day fire sale. It's about moving cars or possibly going bankrupt.

Signore has 20 cars to sell, an investment of nearly half a million dollars. Over the last year, he's averaged five sales a month. Since getting the "notice to close" last week, he's sold two cars.

"I'm angry," Signore said. "This is my asset - they're stealing it away from me."

Signore said he wouldn't have this many cars if he hadn't given in to Chrysler's pleas to buy more cars than usual as it struggled to save itself.

"You had to take more cars to qualify for incentives," Signore said.

Chrysler has offered to help shuttered franchises with their inventories, but half the dealers are going to court on June 3 to halt the forced sell-off.

"This is my retirement ripped right out of my hands," Signore said.

But that's unlikely to save Signore's six-decade old dealership, a legacy passed to him from his father. He'll now have to depend on used car sales to stay open.

[creeper00]

So is it true that the shuttered Chrysler dealers were heavy Republican contributors in the last election?

If this article is true it's a new low, even for Barack Obama.

http://directorblue.blogspot.com/2009/05/red-alert-did-campaign-contributions.html

[jonesjep]

They should ask some of these car dealers who they voted for??? I am sure most followed their piper the UAW who has been leading their entire industry over this cliff for 30 years.

It is a terrible shame but the question needs to be asked of all of these car industry workers....Where is your Hope and Change?

[tiredofthebs]

Oh how my is NOT BREAKING. Like anybody else, I feel for the families effected by this economically, but the auto industry has had it comin' for a LONG TIME. At some point and time EVERYONE has been takin' in a car deal if you dealt with a dealership. Now that outrageous profits have been replaced with overflowing showrooms, it's hard to be sympathetic.

[neturalist]

Yes, there is a problem. And the problem is economic. People lost their jobs do to liberals BS. Company managers went to China & elswere to make bigger profit. But, also let me ask, you car-dealers, how come you did not drop interest rate on your cars 10 years ago? You made a lot on cars and you charged 12-15% interest on borroewed money, so you must made a good profit! And today you cry. - Cry Baby!

Steve Tamas

[Ichabod09]

Sure money would be lost ,but the consumer and market would be on solid footing ,at affordable wages and prices and all of these trillion dollar programs would not be our only option.
Posted by mars7578 at 12:00 PM : May 25, 2009

Great analysis with one problem- political cowardice due to public outrage from perceived property devaluation. Again, a great idea but simply the public won't stand for the air coming out of their financial love toy.

[mars7578]

The auto industry and this administration need to realize the cost effect the market had on price.It is well agreed that everything went up during this paper economic boon but wages.Affordability was base on credit .Now that the value of this paper has greatly declined,the affordability has declined.This means that the cars prices need to decline.The administation in an effort to stabilize the market ,did not allow the market to devaluate to actual value.Therefore the market price of many items including debt did not fall as they should.The only place this took a significant effact was in housing ,although the administation is putting massive amount of money to stop the decline in value.The problem with this solution is that the problem of pricing and a lot of uncollaterized personal debt.The alternative would be to let the prices drop and reissue loans at current value and then work with the financial institutions.Sure money would be lost ,but the consumer and market would be on solid footing ,at affordable wages and prices and all of these trillion dollar programs would not be our only option.

[pollroller1]

Well, I for one LIKE my GM car. It is now 6 years old and I have not had any problems. The wife has a Honda. Her car is nice, but no better than mine. Chrysler? Not too sure about them.

[Ichabod09]

"After 60 years, they don't give me the decency to have a longer period of time to get rid of my inventory," Signore said."
______________________________________________________________________

Car dealers crying about lack of decency is somewhat akin to the madam of a bordello decrying the morality of her johns.

[golfered2]

GM, Ford and Chrysler need 4 times the number of dealers that Toyota or the rest of the foreign carmakers have because the UAW manufactured cars have at least 5 times the number of repairs as the foreign cars have. The engineering at Ford Chrysler or GM are as good as the foreign guys but the manufacturing and assembyly that the UAW does is total crap!!!!!!

[rational_1]

Welcome to the wonderful world of Government Motors and the Obamanomics car plan to save America.
Posted by platteman at 4:55 PM : May 24, 2009

Wish this plan had been implemented BEFORE we sunk billions of my money and yours into these failures. Great, just great - like they couldn't have gone bankrupt half a year ago. I'd like Obama to explain how much money he cost us with this debacle.