Letter from a Dodge Dealer

sjfan · May 21, 2009

I feel bad for this guy, but it was in his contract. That he signed. He isn't some uneducated dullard who signed things he doesn't understand. He's been in this business for decades. He signed a contract. A contract that expressly allow this to happen.

He goes on and on about how this could happen in the US. I, for one, am proud this happened because it shows contract law is still being followed no matter how "cruel" it seems to an individual. (note, his property rights aren't violated. Chrysler didn't hull off his assets; they simply no longer allow him to use Chrysler's brand and benefits).

Yes - the govn't is doing everything to crush the right to do business; And I'm as angry as the next fella. But this situation is not an example of anything except this fella didn't do proper risk management for his business.

(I hate unions about as much as anyone could hate unions. But this issue has nothing to do with anything. Who cares if Chrysler is in trouble or not. Doesn't make a different. They have the contractual right to take the franchise away. This fella agreed to it when he signed the contract. Tough shit).

Quote from jprad:

The guy's dealership didn't fail, it was taken from him. For all we know, he could have been well into the black every year he was in business. Worse, his dealership could very well be handed over to one that's not as well run then his.

Now, if Chrysler was really allowed to fail then both the union and every single one of their dealerships would have been second in line to senior creditors.

But, due to government intervention, that's not what's happening.

Calling this "market darwinism" is laughable.

piezoe · May 21, 2009

What would have been the outlook and the outcome for the Dealer had the Government not gotten involved? Is the Dealer any better or worse off had the Government stirred clear of the entire situation? What would the Dealer's franchise been worth had the Government not been involved?

piezoe · May 21, 2009

Quote from aegis:

The quality of American cars has improved substantially since the late 1990s. They're easily on par with the crap put out by Honda, Toyota, Nissan and Mitsubitchy.

Perhaps that's true. I would not know. However, I have a close friend with money but no mechanical knowledge. He likes Jaguars (Fords). He has owned three late model Jags in 7 years. The engine blocks cracked between the valve chambers on the first two well below 100K miles and he junked them. The latch on the center console broke on the first two in the same place. He is a slow learner and bought a third one a couple years old. The headliner has fallen down in the back seat in that one. I am expecting the engine to fail any day now as the car has over 50K miles. Would i buy a Ford. No way!

jprad · May 21, 2009

Quote from piezoe:

What would have been the outlook and the outcome for the Dealer had the Government not gotten involved?

That is entirely my point here and was backed up by Chrysler's CFO this morning who went on record that all of their dealerships will close if the bankruptcy court does not approve of the merger with Fiat.

Funny how everyone here is carping about the franchise contract this guy signed. How is that any different from a legal perspective then established bankruptcy laws regarding the seniority of bondholders over employees and shareholders?

Bottom line is that Chrysler should be put through a standard bankruptcy where all of the dealers are wiped out, but will at least be able to salvage the sale of their remaining inventory in the process since they'd all be on equal footing.

ByLoSellHi · May 21, 2009

GM's new strategy basically boils down to discharging pension and health care benefits to retirees (the taxpayers will pick that tab up), firing most of their U.S. workers (well under way), and building their cars in China so that they can compete with Kia Soul pricing.

When you can't beat 'em....

...you know the rest.

saxon22 · May 21, 2009

Quote from AMT4SWA:

BTW, if I could buy one of these.....I would buy 2 of them!!!

http://www.autoblog.com/photos/2009-focus-rs-in-blue/1214356/

I do agree Honda builds a great car but their styling lately has been a bit off (Accord.....or anything over at Acura!). Toyota does nothing for me (IS350 of the Lexus brand is nice but too darn small in the backseat) and their quality has been slipping.

I am an Audi driver and fanboy myself.......I LOVE the new S5 and the R8 is brilliant! I have not owned an American car in many years but I am starting to see some life at Ford.....I hope they can hold on!

Well, I am not a fan of German cars. Audi is nice but once it starts to fall apart, parts are rather pricey. Had 2000 A6 with 4.2 L engine and it drove excellent when it did. The repairs were a major hassle.

ByLoSellHi · May 21, 2009

Modern German cars suck. Way too many components, way too much complexity, and way too much cost and upkeep associated with processes that the Japanese have figured out how to regulate at much lower costs and using much simpler parts and processes.

I'll take a Lexus over a Daimler product any day.

The last true Mercedes were built in the 80s.

Give me a 1985 Mercedes E300D W-124 any day of the week over the new garbage Daimler is putting out.

Compare the interior components like the door lock - solid metal versus hollow plastic.

Compare the thickness of the glass, the quality of the leather and wood.

Modern Mercedes are glorified Toyotas, but less reliable and much more expensive than Toyotas.

The same is true of modern BMWs - take a look at their dashboards, feel the interior trim.

GTG · May 21, 2009

What I read into the story is what others have noticed. This isn't so much an article about the economy or the Chrysler bankruptcy...its a warning about buying franchises. Stories like this where the franchisee gets completely screwed are common.

lindq · May 21, 2009

Quote from ByLoSellHi:

Modern German cars suck. Way too many components, way too much complexity, and way too much cost and upkeep associated with processes that the Japanese have figured out how to regulate at much lower costs and using much simpler parts and processes.

Drive a new C class and I think you'll change your tune. I just bought a C350, and it's the best car they've made in years. Hopefully they're getting over the Chrysler fiasco, during which managers did their best to trash the world's best brand.

gigsup · May 21, 2009

Quote from ByLoSellHi:

Modern German cars suck. Way too many components, way too much complexity, and way too much cost and upkeep associated with processes that the Japanese have figured out how to regulate at much lower costs and using much simpler parts and processes.

I'll take a Lexus over a Daimler product any day.

The last true Mercedes were built in the 80s.

Give me a 1985 Mercedes E300D W-124 any day of the week over the new garbage Daimler is putting out.

Compare the interior components like the door lock - solid metal versus hollow plastic.

Compare the thickness of the glass, the quality of the leather and wood.

Modern Mercedes are glorified Toyotas, but less reliable and much more expensive than Toyotas.

The same is true of modern BMWs - take a look at their
dashboards, feel the interior trim.

I agree, the last great Mercedes, although the one after was a good one too. Bought a 1985 yellow 300D and sold it a year later, then bought a 1987 blue 300D.

The one thing Mercedes has over the Asians is heft in the body structure.......rigidity. Another was emergency handling. The last Benz I owned was in 1995, so Lexus may be very comparable. I now drive a 2003 Nissan 350Z and still love it.