Car Dealers Reeling From Forced Closures
Many To-Be-Shuttered Chrysler Dealers Offering Deep Discounts To Avoid Bankruptcy
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Play CBS Video Video Chrysler Closings Nationwide Greg Signore, an owner of a Chrysler dealership in N.J., is one of nearly 800 Chrysler dealers nationwide given notice that they will be closed. Michelle Miller reports.
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(AP)
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"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.
©MMIX, CBS Interactive Inc.. All Rights Reserved.
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See all 71 CommentsIf 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
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?
Steve Tamas
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.
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Car dealers crying about lack of decency is somewhat akin to the madam of a bordello decrying the morality of her johns.
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.
You expect decency from corporate America?? like people honestly expect products, food and things to REALLY be safe?? made by companies whose ONLY interest in the stock holders and quarterly profits??
"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."
Good gawd these cars have gotten insane, $33,000 for a freaking CAR??? even at $25,000 it' still a huge ripoff!
TOO bad dealers, you have been selling over priced KRAP that falls apart, and the whole industry grew way to big- based solely on brainwashing the idiots out there that they need a new $25,000 machine every 5 years or so to keep up with the newest STYLES! hello, but $4/ gal gas, $500/mo full coverage insurance, $15% interest on a piece of krap that rusts trhu, needs recalls or falls apart and devalues before its even paid for is the problem.
The original Model T Ford car got up to 21 miles per gallon (mpg). One hundred years later, the average passenger car in America still only gets 23 mpg, EXPLAIN THAT!
Assembly-line production methods introduced by Henry Ford in 1913 enabled the price of this five-seat touring car to drop from $850 in 1908 ($19,000 in 2008) to $300 in 1925. (What cost $300 in 1925 would cost $3655.37 in 2008. )
EXPLAIN THAT, a car in 1925 selling new for $300 is with inflation a $3,655 car in TODAY's money! EXPLAIN how come it's 500% MORE
Posted by platteman
Sounds like a formula for failure. It is so reassuring that the government feels it can do a better job running the automobile industry than GM or Chrysler. The government has been steering GM and Chrysler into bankruptcy for months. The idea that GM and Chrysler executrives could avoid babkruptcy is a sham. No matter what plan they devised, the government would settle only for bankruptcy. This sounds too much like something Hugo Chavez would do.
In the first auto age (pre-WWII), cars were sold locally, driven locally, and made by a plethora of car companies offering wooden frames, 12 cylinder engines, etc. etc. The Depression began to clean things out via mergers and bankruptcies and after the war you were left with essentially only 3 major auto manufacturers. Then the second auto age began, with suburban growth, an auto dependent lifestyle, and travel at will anywhere across the country.
And why not? If your buggy broke down anywhere in the country, service was available, parts were available, and usually by the end of the day you were on your way again.
Say what you want about the big 3, or the big 2 counting Ford and GM. You can travel the country and not worry about a sudden repair. After I retired I've driven across the country to some very remote places in Nevada, Utah, Montana, and Wyoming. I wouldn't be caught dead in a KIA, or even a Toyota. Break down and that's it. No dealers, no repair centers, no parts, nothing.
All these rice grinder manufacturers serve the yuppy class in the big urban areas. Only Ford, GM, and to a lesser degree Chrysler had a coast to coast network of parts and service that allowed you to travel ANYWHERE with confidence. Now that network is being disassembled.
I will say this again and again. When you have 40 brands of cars and none made both in America and by American owned companies, the prices will go way up, the quality will go way down, and the service, where and if it is available, will stink. Travel by car will become much more difficult and inconvenient and risky because we allowed a national coast to coast network of dealers to disappear.
If I'm wrong, I would like someone who lives in the west to write in and tell me so. But I've traveled through Hanksville, Utah and Ely, Nevada, and Cody, Wyoming and I sure didn't see any Toyota or Kia or Subaru or Nissan dealers anywhere around but I did see GM, Ford, and Chrysler.
Oh yea, these guys are hurting all right. LOL!!!
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Nope, but If I can plainly see that my employer's business practices will inevitably lead to failure, I don't wait for such notice.
In the case of Chrysler, we have known for years that their business model was outdated, and it was only a matter of time. In the 70s, when auto companies were laying off their labor, it is only logical to have asked, "If auto labor is laid off, then steel, then other support services, who is then going to buy the products they sell?"
We in Detroit asked these questions, but the car makers never answered, seems like they figured that the rich would buy enough to keep them afloat, they canned cheap, efficient models for the overpriced tanks they sold.
Remember the Bricklin? Hand made, sold for $7k. The DeLorean? They framed John D (who gave us the mustang, one of the US' finest cars) so his business model couldn't compete.
This day was foreseen thirty years ago, and those who even accurately predicted the time were ignored. If thirty years isn't enough time to prepare, then you have a problem, and it isn't the auto makers, or the president, or the consumer.
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