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Re: In Stunning Reversal GM Asks Closed Auto Dealers To Reopen

You're completely missing the real outrage here. These dealerships were being closed in an effort to bring an automaker Washington essentially owns back to profitability. Lay-offs and shut downs are an inescapable part of any business restructuring. Now, in a craven political move, we're seeing them sustained on the government teat. Profit is what politicians covet, not what they know how to create. Certainly none more so than Obama.

The UAW gets a sweetheart bankruptcy deal, now the dealers have their hands back in our pockets.

Seriously. How will GM ever turn a profit if bankruptcy = everything remains exactly the same as it was before plus Washington is more involved in strategy? We are doomed.

There are more Chevrolet dealerships than there are Honda, Toyota, and Nissan COMBINED. Maybe we should ask Starbucks about the wisdom of opening stores close enough to one another a MOAB would raze a dozen. We don't need a Chevy dealer everywhere there's enough people to support a McDonalds. There are 13 Chevy dealers within 25 miles of me in Dallas. How can that be profitable? God forbid I ever buy a Chevrolet, all I've got to do is go dealer-to-dealer until I squeeze every last dime of margin out the sales price.

Because the last thing in the world a person wants to do when they buy a new car is have to drive it for an hour to get it home.

This is a quintessential demonstration of how nothing controlled by Washington will ever do anything but grow larger at the taxpayers' expense. I, for one, welcome the opportunity to have my tax dollars squandered so Chevrolet can continue to operate in an unprofitable manner well into the 23rd century.


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Comments (9)

The UAW has found themselve... (Below threshold)
Brett Buck:

The UAW has found themselves and "honest politician"! Meaning, once he is bought, he stays bought.

It will not matter how many... (Below threshold)
Gmac:

It will not matter how many dealerships they ask to remain open, they are forever branded as "Government Motors".

Leave us not forget, in all... (Below threshold)
Marc:

Leave us not forget, in all the bluster about those EVIL CEOs and such that have taken GInormous bonuses... Government Motors, nearly wholly owned by obama and the UAW, are allowing the previous CEO (the one fired by obama) to rake in a multi-million dollar bonus.

It's not so much that GM di... (Below threshold)
Jim Addison:

It's not so much that GM didn't have too many dealerships. A big problem was which ones they decided to close. In many cases, well-performing outlets in areas not serviced by other dealers were closed, while less profitable dealers close to others kept their franchises. So that whole process was handled stupidly, with a far worse outcome than a straightforward GM bankruptcy would have begat.

But this is stupidity squared. These dealerships were handed death sentences months ago. Does Obama think the salesmen, managers, finance people, mechanics, and clerks are just hanging around the water cooler waiting for the day the doors are chained shut? Of course, many or most have left for pastures with a little grazing left in them.

The owners have sold down their inventories - GM wasn't shipping them any more cars even if they wanted them. It would take a huge investment of capital to restock those empty lots, and to retrieve lost staff or train replacements. And who in their right mind would risk money doing that, knowing that Obama's next whim might flutter back the other way again?

I know it has never occurre... (Below threshold)
Matt:

I know it has never occurred to GM, but if they would just make cars we want to buy at a price we can afford, they wouldn't be in trouble? It's not a lack of dealerships, its a lack of product worth the investment.

A serious question: Is the... (Below threshold)
a. moral:

A serious question: Is there pending litigation between the dealerships and GM, or was any potential exposure for those agreements discharged in the takeover? I don't think more dealers are going to improve their product, however, bringing some back may be an attempt to improve their image and save some litigation costs. Just a thought.

I disagree with the notion ... (Below threshold)
George Author Profile Page:

I disagree with the notion that more dealerships equals less profits. On the contrary, many rural Americans (the ones who tend buy more American cars versus their urban counterparts) have lost their only nearby GM/Chevy dealership and will probably ultimately choose a different make for their next vehicle purchase.

The boneheaded move was closing so many dealerships. The dealerships could have downsized as necessary.

GM's real financial woes aren't the dealerships; it's the obscene union-mandated retirement benefits (and employee benefits) which can only be cured through a bankruptcy. GM has 90,000 employees and pays for health care costs for 1.1 million people. GM has a 2.5 ratio of retirees to workers.

In a stunning reversal Barr... (Below threshold)
914:

In a stunning reversal Barry renounces socialism.

NOT!!

The slipery slope begins. ... (Below threshold)
Jay:

The slipery slope begins. I wonder what political favors will be given to whom in order to to get which auto dealerships reopened?....Hmmmmmm?




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