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Live Blogging: Dealers Get Their Day In Court

Chrysler's dealers are getting their day in court. In what is expected to be a marathon session, U.S. Bankruptcy Judge Arthur Gonzalez is to hear testimony today from dealers that are being dropped by Chrysler under its plan to establish a more efficient dealership network.

Chrysler is seeking Gonzalez's approval to terminate 789 dealership agreements, or roughly a quarter of the total. Staff writer Tomoeh Murakami Tse posted updates on The Ticker's Twitter.

By Dan Beyers  |  June 4, 2009; 8:00 AM ET
Categories:  The Ticker  
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Comments

GM has more Dealerships than Starbucks has coffee shops.

Closing 1,100 is no where near enough!

These commie whiners in the Dealerships are costing the US tax payer money and ripping off the US consumer to the tune of thousands on every car.

GM should get rid of all its Dealerships and start to sell over the Internet.

The company needs to move into the 21st Century.

Posted by: walker1 | June 4, 2009 8:14 AM | Report abuse

Recent history of dealerships going out of business suggests the propriety of reducing their number, but it seems to me that this is something the marketplace can well take care of on its own, and in a way far more in the interest of the consumer.

@ walker1: one of the stated objectives (IMHO really the only one) is to decrease the competition in order to improve dealer profitability. I do think your idea of direct sale via the internet has merit, though. It might go a way toward reestablishing the competition being lost by the reduction in the number of dealers.

While we've all heard tales of ripoffs in the service end of the auto business, I really don't see how the superfluity of dealers is costing the taxpayer in the direct dealer/customer transaction of vehicle purchases when the over abundance of dealers has been a force in keeping the price down. Whether manufacturing productivity needs to be improved is a whole other can of worms.

Posted by: rsh43 | June 4, 2009 12:24 PM | Report abuse

rsh43 wrote: "...it seems to me that this is something the marketplace can well take care of on its own..."

I think you assume car dealers operate in a free market. I don't see it, especially as far as consumers are concerned.

State "dealer protection" laws make it almost impossible for an auto manufacturer to terminate a dealer franchise. GM had to spend $2 BILLION to buy out Olds dealers. State "dealer protection" laws routinely stifle competition, especially internet sales. One state--I think it was NC--made it a felony to buy a car from an out-of-state dealer over the internet. The Consumer Federation of America estimates that these state "dealer protection" laws add on average $1500 to the cost of a new car.

If we had a free market in retail car sales, I'd be able to buy direct from the manufacturer. I'd be able to buy a new car from Amazon. I'd be able to sue a dealer for for fraud.

But I can't. So where's the free market?

After having dealt with numerous car dealers in buying new cars, I have ZERO sympathy for them. They deserve as much recourse as any of their customers who get tricked into paying too much for a new car. Which is ZERO.

Compared to car dealers, the investment bankers who brought us sub-prime MBS-backed CDOs are saint.

Posted by: Garak | June 4, 2009 2:10 PM | Report abuse

Walker1...have you ever heard of anti-
trust laws ?

Posted by: usafirst1 | June 4, 2009 5:38 PM | Report abuse

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