The Down Range Forum
Member Section => Politics & RKBA => Topic started by: Hazcat on May 20, 2009, 03:02:45 PM
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May 19, 2009
Letter from a Dodge dealer
letter to the editor
My name is George C. Joseph. I am the sole owner of Sunshine Dodge-Isuzu, a family owned and operated business in Melbourne, Florida. My family bought and paid for this automobile franchise 35 years ago in 1974. I am the second generation to manage this business.
We currently employ 50+ people and before the economic slowdown we employed over 70 local people. We are active in the community and the local chamber of commerce. We deal with several dozen local vendors on a day to day basis and many more during a month. All depend on our business for part of their livelihood. We are financially strong with great respect in the market place and community. We have strong local presence and stability.
I work every day the store is open, nine to ten hours a day. I know most of our customers and all our employees. Sunshine Dodge is my life.
On Thursday, May 14, 2009 I was notified that my Dodge franchise, that we purchased, will be taken away from my family on June 9, 2009 without compensation and given to another dealer at no cost to them. My new vehicle inventory consists of 125 vehicles with a financed balance of 3 million dollars. This inventory becomes impossible to sell with no factory incentives beyond June 9, 2009. Without the Dodge franchise we can no longer sell a new Dodge as "new," nor will we be able to do any warranty service work. Additionally, my Dodge parts inventory, (approximately $300,000.) is virtually worthless without the ability to perform warranty service. There is no offer from Chrysler to buy back the vehicles or parts inventory.
Our facility was recently totally renovated at Chrysler's insistence, incurring a multi-million dollar debt in the form of a mortgage at Sun Trust Bank.
HOW IN THE UNITED STATES OF AMERICA CAN THIS HAPPEN?
THIS IS A PRIVATE BUSINESS NOT A GOVERNMENT ENTITY
This is beyond imagination! My business is being stolen from me through NO FAULT OF OUR OWN. We did NOTHING wrong.
This atrocity will most likely force my family into bankruptcy. This will also cause our 50+ employees to be unemployed. How will they provide for their families? This is a total economic disaster.
HOW CAN THIS HAPPEN IN A FREE MARKET ECONOMY IN THE UNITED STATES OF AMERICA?
I beseech your help, and look forward to your reply. Thank you.
Sincerely,
George C. Joseph
President & Owner
Sunshine Dodge-Isuzu
http://www.americanthinker.com/blog/2009/05/letter_from_a_dodge_dealer.html
Highlight (bold) is mine
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This letter could have been written by any of the affected dealers around the country. These are the people that
Premiere President Obama and the Politburo Congress are throwing under the bus in order to pay back their union benefactors. What the HELL has happened to this once-great country that I love so much? :'(
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This is completely unbelievable to me! I cannot imagine some asshat taking (not buying, TAKING!) my business and GIVING it to some one!
I PAID FOR IT, I BUILT IT! This is totally incomprehensible to me!
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The same thing would have happened if Chrysler had gone into chapter 11. The first thing the receiver would have done is force consolidation and layoffs. It still sucks for this guy. He should at least be able to have the company take back the inventory. :-\
FQ13
PS Haz, most franchise contracts work like this. The company can take them away.
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Waiting to sit down with my uncle ...
He is the dealer of record for the franchise owned by a small group of business people here, and he is the general manager over all operations. He has received multiple awards in recent years for outstanding service and sales. His sales record has exceded their expectations even though they keep expanding his territory and raising the goals accordingly.
A week ago last Monday he received a letter praising his excellance and expanding his territory even further, then Friday he received a letter informing him that in sixteen months his Chevrolet franchise will be terminated.
This dealership has a strong 75 year history in town, and it will be missed >:( However, the board is stating they will remain as a used car business and also provide service.
*Territory is the area you are the recognized dealer for, so if Chevrolet gets a call, letter or e-mail from someone in those geographic boundries they are refere to that dealer and the dealer is notified.
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The same thing would have happened if Chrysler had gone into chapter 11. The first thing the receiver would have done is force consolidation and layoffs. It still sucks for this guy. He should at least be able to have the company take back the inventory. :-\
FQ13
PS Haz, most franchise contracts work like this. The company can take them away.
While you are correct, you apparently miss that this guy is an independent businessman. Forced consolodation and layoffs of Chrysler employees would have been demanded, but neither of those, in and of themselves, would have affected this dealer.
The entire reason for decreasing the number of dealerships (since they have no direct cost to Chrysler) is so that Chrysler's credit corporation can free up operating capital. This dealer's letter mentions that he has $3 milliong dollars worth of inventory that he's paying interest on (that's called floorplanning......I used to be in the car business, as well). And he has this money that he's paying interest on finanaced by Chrysler Credit. By cutting these dealers loose, Chrysler no longer is financing the dealer's inventory, which frees up that $3 million dollars to use as capital elsewhere. Is it a good move? Time will tell. It may prove to be beneficial in the short-term and catastrophic in the long-term.
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This kind of crap makes my blood boil. >:( >:( >:(
If things keep following the same trends, in less than ten years we, as a nation, will be back where Russia WAS forty years ago. Or worse.
DAMMIT.
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This kind of crap makes my blood boil. >:( >:( >:(
If things keep following the same trends, in less than ten years we, as a nation, will be back where Russia WAS forty years ago. Or worse.
DAMMIT.
Peg you're too optimistic. It won't take NEARLY ten years.
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Peg you're too optimistic. It won't take NEARLY ten years.
I try not to be too gloomy.
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The thing that is being masked from the general public is how much this will really save the companies. The only real issue I can find is the credit crunch. The mfg. is financing most new vehicles on the lots, and they are in a cash flow bind. They state that by eliminating dealers they will save in reps and other expenses in supporting the dealers. However, the dealers pay for this in annual fees. So, not only will they cut overhead, but they will lose income. These closings won't help anything in the long run, and they will most likely kill the "Big Three" (Chrysler and GM because they are hurting and Ford by association).
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The thing that is being masked from the general public is how much this will really save the companies. The only real issue I can find is the credit crunch. The mfg. is financing most new vehicles on the lots, and they are in a cash flow bind. They state that by eliminating dealers they will save in reps and other expenses in supporting the dealers. However, the dealers pay for this in annual fees. So, not only will they cut overhead, but they will lose income. These closings won't help anything in the long run, and they will most likely kill the "Big Three" (Chrysler and GM because they are hurting and Ford by association).
You are correct, sir!
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While you are correct, you apparently miss that this guy is an independent businessman. Forced consolodation and layoffs of Chrysler employees would have been demanded, but neither of those, in and of themselves, would have affected this dealer.
The entire reason for decreasing the number of dealerships (since they have no direct cost to Chrysler) is so that Chrysler's credit corporation can free up operating capital. This dealer's letter mentions that he has $3 milliong dollars worth of inventory that he's paying interest on (that's called floorplanning......I used to be in the car business, as well). And he has this money that he's paying interest on finanaced by Chrysler Credit. By cutting these dealers loose, Chrysler no longer is financing the dealer's inventory, which frees up that $3 million dollars to use as capital elsewhere. Is it a good move? Time will tell. It may prove to be beneficial in the short-term and catastrophic in the long-term.
EXACTLY! Say I own franchise X and the parent company goes under consolodation chaper 11 or 7 then I will not be directly affected as I OWN this franchise and can continue to offer the product. But to have the parent company simply say "You're out" with no compensation (buy back of product / inventory) is inconceivable.
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EXACTLY! Say I own franchise X and the parent company goes under consolodation chaper 11 or 7 then I will not be directly affected as I OWN this franchise and can continue to offer the product. But to have the parent company simply say "You're out" with no compensation (buy back of product / inventory) is inconceivable.
I'd think the company would be in a better cash-flow position if they took back these dealers inventory and allocated it to the remaining dealers. That way they would have an available inventory on hand, allowing them to furlough some of their production personnel for a short period of time, thereby saving some payroll costs. Of course, that would affect union employees, so I'm sure the government won't allow THAT.
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EXACTLY! Say I own franchise X and the parent company goes under consolodation chaper 11 or 7 then I will not be directly affected as I OWN this franchise and can continue to offer the product. But to have the parent company simply say "You're out" with no compensation (buy back of product / inventory) is inconceivable.
Its not inconceivable, its just damn unfair. It happened to IHOP and TGI Fridays owners when the company wanted to cut back by limiting distribution of supplies and such. The earlier posts are right when they say that chrysler is cutting back on dealers to lower financing costs. It doesn't strike me as a good move, but they're short on capital and having it tied up in dealer floor plans and 60 month leases and financing is killing them shorterm. Of course, cutting back supply, and hence demand, as the Toyota dealer is still there, could kill them long term. Welcome to 1983, round two.
FQ13
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The same thing happened to BOTH dealerships here in Laconia, GM AND Chrysler.
Where's TAB with one of his asinine "Private Property" rants NOW ?
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IHOP and TGI (I kenew a DQ owner that lost his francise) DO NOT have to eat millions of dollars in inventory. The DQ guy had all of his 'stuff' bought back by DQ (ice cream machines, signage, etc).
So those are NOT the same as these dealerships. And The guy in the letter is losing his just so it can be given to someone else!
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IHOP and TGI (I kenew a DQ owner that lost his francise) DO NOT have to eat millions of dollars in inventory. The DQ guy had all of his 'stuff' bought back by DQ (ice cream machines, signage, etc).
So those are NOT the same as these dealerships. And The guy in the letter is losing his just so it can be given to someone else!
Haz, I am one hundred percnt on board with you morally. The guy should at least be compensated for his inventory. Its the only decent thing to do. The question is when did decency mater to a desperate corporation? The franchiser owns the franchise. The contract the franchisee signs is about as fair to them as the "standard" rental contracts (written by the board of realtors) is to the tennant. Its reason number 1005, to hire a lawyer before signing anything. The trouble is that this guy has zero leverage and Chrysler has zero money anyway. It just flat out sucks. What pisses me off about it is that we've seen this movie before. Detroit builds expensive gas guzzlers, the Japs build cheap, reliable fuel effecient cars, and then the price of gas goes up in a time of expensive credit. Were the big three paying zero attention to their own history?
FQ13
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Its not inconceivable, its just damn unfair. It happened to IHOP and TGI Fridays owners when the company wanted to cut back by limiting distribution of supplies and such. The earlier posts are right when they say that chrysler is cutting back on dealers to lower financing costs. It doesn't strike me as a good move, but they're short on capital and having it tied up in dealer floor plans and 60 month leases and financing is killing them shorterm. Of course, cutting back supply, and hence demand, as the Toyota dealer is still there, could kill them long term. Welcome to 1983, round two.
FQ13
Chrysler got out of the leasing business about a year ago because the residual values on the off-lease vehicles were killing them. Remember a couple of years ago when they advertised full-size 4WD 4-dr pickups for $250 a month lease? That was based on the residual (end of lease) value of the vehicle that was calculated MUCH higher than it actually turned out to be, since gas prices had gone through the roof by that time. In many ways they have screwed themselves. With the low lease rates that stuck them with off-lease vehicles that would bring FAR less than break-even for them, to the moves they're making now........two different cases of short-sightedness in sacrificing the long-term for short-term gain.
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I certainly sympathize with Mr. Joseph. Work hard and you'll get your just reward. Or......BOHICA.
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While I do feel for people with this "consolidation" crap happening, but I wonder what would a letter from the other dealer be if he had been selected to give up his franchise.
This is not a win win situation at all! In fact I see it as a minimize your loss situation.
Still for anyone caught up in this crap I do feel for ya!!
(http://www.steyrclub.com/vb/images/smilies/bs.gif)
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Sean Hannity had a Long Island dealer who had a solvent dealership with the same story the other day. There seems to be no rhyme or reason to selecting who, since this dealer knew several other dealerships in the area that were failing but they were able to keep their franchise.
Rush Limbaugh suggested looking at the party affiliations of the terminated dealers...
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Solvency does not appear to have any bearing on this round of cuts. The Chrysler dealers that got notice recently had no financial issues, and were doing well.
Last year and through the winter GM pulled franchises on a couple dealers in the area, because when they asked for a higher percentage of cash for the new stock on the lot the dealers could not come up with it. However, our local that got a letter could have written a check for everything on their lot if asked ... Damn, a couple of the board members have the cash to either one write the check, and the others have the credit available to do it. These companies are just streamlining to get ready for a major restructure that will probably include bankruptcy to clean up the union mess.
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This is completely unbelievable to me! I cannot imagine some asshat taking (not buying, TAKING!) my business and GIVING it to some one!
I PAID FOR IT, I BUILT IT!
I SET IT ON FIRE AND DESTROYED THE WHOLE THING!
They could pound sand if they think that they would do something like that to me. Oh, and I would blame it on the environmentalists. ;)
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I SET IT ON FIRE AND DESTROYED THE WHOLE THING!
They could pound sand if they think that they would do something like that to me. Oh, and I would blame it on the environmentalists. ;)
Nice, killing 2 birds with one match ;D
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And what is everyone doing about this communist takeover? Wringing hands again won't cut it!!!!!!!!!!!
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Does this dealer own the vehicles on his lot or do they belong to Chrysler? If he owns the vehicles, a fire sale or a 2 for 1 sale would clear his lot fairly quickly. He can sell them until June 9th with the factory warranty, and if he goes internet on a cash basis they won't last long. Lets face it, some return is better than none. If Chrysler owns them, park them on the street with the keys in them, and tell the UAW to come pick them up. They are going to be the principle owners now.
Oh by the way. The UAW announced that the 55% stake they get in Chrysler (from the BHo admin) will be sold to fund UAW retirement health programs. Since this "bankruptcy" deal screws all the independent investers, who were already in Chrysler, exactly who is the UAW going to sell to?
I see Gov control of the UAW retirement fund coming.
It's exactly what they've been asking for.
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While I can sympathize that this guy is probably a stand up car dealer and he is a good employer in his community, I can't sympathize too much with the industry as a whole.
Most of my dealings with dealerships have been in this part of the country. Around here, car dealers are just one step BELOW lawyers on the skeezy shitepile of shifty, lying asshats scale.
I agree that Chrysler should've handled this differently but I could care less what happens to Chyrsler! It's really more about the hundreds of thousands of citizens around the country that are adversely affected by the blind dimwits at the middle of this bailout scheme.
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So....what happens if the dealers just torch their entire inventory?....even if insurance doesn't cover the loss, they're in no worse shape than they are now.....
...or just give them away to a charity & take the write-off......
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So....what happens if the dealers just torch their entire inventory?....even if insurance doesn't cover the loss, they're in no worse shape than they are now.....
...or just give them away to a charity & take the write-off......
WHAT ARE YOU SAYING!!!
Dealers shouldn't torch their inventory, enviromentalists should do it or them as their part of helping the economy and reducing the carbon footprint of America. ;)