Letter from a Dodge Dealer

Bankruptcy protection allows way to much jockeying and game playing.

This is especially the case where businesses know, well in advance, that they will be definitely be filing, but mislead suppliers and others.

There are so many small, family owned auto parts' suppliers that will either lose money for the year or go belly up because they either won't get paid or will get paid 10 cents on the dollar from Chrysler, for parts already delivered, while the UAW gets full protection.
 
Quote from bugscoe:

Maybe I'm missing something here but this guys point seems to be that he isn't just going out business, HIS business is being given to another dealer.

If all the cars he sells are from bankrupt car companies, what is the 'other dealer' going to be selling that the guy in the story couldn't continue to sell?
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A franchise generally allows for a dealer exclusive territory. What he is saying is that his territory will be taken away and merged with one of the remaining dealers.

The thinking is that if there are fewer dealers, then customers will not be able to bargain as strongly thereby raising prices and profits. Of course, this is non-sense because most people probably wont purchase a new car if the nearest service center is an hour away. Also, Chrysler and GM will still be competing with the imports.

If they just wanted to raise dealer profits then they should have increased the prices across the board and given the dealers a larger kickback.

The whole thing is amazingly stupid.
 
If you own a franchise, you don't own jack shit. You're an indentured servant to the franchise owner. To be used and abused at will.

Chrysler is bankrupt and is on life support because of the funds provided by the govt. This fool mis-calculated because he thought the Govt. would bail his ass out.

He should be griping about the union workers and Chrysler's incompetent over-compensated management and directors.




Quote from Tauvros:

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
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What fkbsuhites said is true.

In fact, franchisees have been abused so badly, that many states have adopted legislation to particularly extend specific protections to franchisees, because of the disparity in bargaining power and positions between a franchisor and franchisee.

I try not to speak about anything I don't have first hand experience with, and I have first hand experience in this.

If some of you saw the hoops that some franchisors make their franchisees jump through, the fees they charge them, and the tenuous grounds that they can rely on to terminate their franchise agreement, you'd be shocked.

I'm talking about a franchise where the franchisee has paid 250k or more to the franchisor, plus other expenses (that may be more than the franchise fee), and if the franchisee doesn't have x number of specific chairs in their place of business, or x number of rolls of toilet paper in stock at any given time, they can be warned and terminated.

A particular chain casual restaurant dictates exactly how many loafs of bread and bagels must be in the display case, and in arranged what order, among other things...

I've never seen more oppressive and one sided documents as franchise agreements.
 
Quote from lindq:

Chrysler doesn't belong in business. Either the government kills them, or the market. Either way, they deserve to die.

While I feel bad for anybody losing their living in this economy, the failure of his dealership is the failure of his company.

He says that it's through no fault of their own. That's just not correct. They've built and sold crappy vehicles.
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I've had just about every make of vehicle including two Chryslers. I'd have to say that the two Chryslers including the one I have now were about the best of any that I had.

Ran the first Chrysler for 10 years and didn't have to do anything but change the oil. Same with the one I have now, five years on and all I did so far was add gas and change the oil.

I think a lot of vehicle choices are made today because of trends or attitudes. I hear things like I won't buy that, it's no good, it's not Japanese. However every time I hear that it comes from people that have very little mechanical aptitude or understanding.
 
It seems to me that the dealers being closed should be able to sue to be part of the bankruptcy petition. They should have the same rights as other contractural entities. The president and his GD administration should stay out of fixing the bankruptcy.
 
Quote from qwiktrade:

A franchise generally allows for a dealer exclusive territory. What he is saying is that his territory will be taken away and merged with one of the remaining dealers.

The thinking is that if there are fewer dealers, then customers will not be able to bargain as strongly thereby raising prices and profits. Of course, this is non-sense because most people probably wont purchase a new car if the nearest service center is an hour away. Also, Chrysler and GM will still be competing with the imports.

If they just wanted to raise dealer profits then they should have increased the prices across the board and given the dealers a larger kickback.

The whole thing is amazingly stupid.
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This just about sums it up. They could have tried raising prices but I don't think it would have worked.

Hate to say it, but Chrysler's legal right to revoke the dealership was probably written into their contract. The guy who wrote the letter probably couldn't conceive of this actually happening, and his counsel didn't tell him about it.

If Chrysler had no right to do it, we'll hear about it soon enough, but don't hold your breath.
 
Quote from Sam Mcgee:
I think a lot of vehicle choices are made today because of trends or attitudes.
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If that's true (and I'm not sure it is true), then the trend was established by Chrysler itself (and Ford and G.M.) when they produced shitty cars and mishandled strategy for a couple of decades in a row.

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EDIT: Canadian industry analyst on TV right now and confirms that NA auto dealers are franchisees and typically on 5 year contracts. The manufacturer can choose not to renew dealer licenses at at the end of any term. They are only liable if they try to revoke the license before the contractually stipulated term.
 
Quote from Sam Mcgee:

I've had just about every make of vehicle including two Chryslers. I'd have to say that the two Chryslers including the one I have now were about the best of any that I had.

Ran the first Chrysler for 10 years and didn't have to do anything but change the oil. Same with the one I have now, five years on and all I did so far was add gas and change the oil.

I think a lot of vehicle choices are made today because of trends or attitudes. I hear things like I won't buy that, it's no good, it's not Japanese. However every time I hear that it comes from people that have very little mechanical aptitude or understanding.
More...

I've owned a 5 Jeep Wranglers for use in the Tahoe-area since I was a kid. Resale has always been fantastic, but I realize that's certainly not the norm with their other products.
 
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