Letter from a Dodge dealer

[Hazcat]

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

[tt11758]

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?   

[Hazcat]

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!

[fightingquaker13]

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.

[MikeBjerum]

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.

[Sponsor]

[tt11758]

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.

[PegLeg45]

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.

[tt11758]

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.

[PegLeg45]

Peg you're too optimistic.  It won't take NEARLY ten years.

I try not to be too gloomy.

[MikeBjerum]

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).