That is just the beginning. GM plans on cutting their dealer network in half or close to it. Most these closings will be as a result of Saturn, Saab, Pontiac and Hummer being shut down. The big hit will be coming after they file for bankruptcy in the next 30-60 days.
I think I don't quite understand what the manufacturer really puts into a dealership besides the license to sell said cars. I was always under the assumption that the dealership was owned by a private entity and then signed a contract/license agreement to sell a certain manufacturers cars.
You're right the dealerships are individually owned businesses but they are stuck in a no win situation with the manufacturers at this point. As the manufacturer is cancelling the contracts to sell their cars (and, very importantly, the financing system) GM is, effectively, closing the dealerships.
I suppose it's possible that some will switch brands but it seems unlikely in this economy.
Then maybe the media needs to change the way they report the issue. Instead of saying that GM is closing the dealerships maybe they should report that GM is canceling contracts with dealerships. May not sound as good for GM but at least it is more truthful but then again it is the media we are talking about isn't it.
It's about time they cut some of the fat off. I can probably count 10 dealerships that I see on my way into work each day. You will pass a Chevy/GMC dealership and then another two miles down the road, there will be another. It is completely pointless. I am just wondering what is going to happen with all of the land/buildings that these dealerships take up. Hopefully they won't become vacant lots. That would be more of an eyesore than all of the crap cars they sell on the lots now.
There is too many anyways. To answer to the ? Of what do they put into the dealerships other than the license, brochures, discounts, warranty work, parts inventory, employees get a lot of gm benefits, the cost of delivering the cars to different dealers for the cars to just sit there, and other things. A dealership costs GM alot of money, about 1 to 2 million a year, I read this in consumer reports, toyota spends about 5 mill per dealership every year, it is a lot of overhead expenses to get rid of.
It is smart for them to do this.
GM is famous for stacking dealerships on top of each other in the same nieghborhoods - forcing GM dealerships to compete against each other for the same customers and cutting thier own throats to make a sale.
Does anyone know if GM will be buying back the new car inventories that these dealers have on thier lots - all 1,100 of them?
When our local Chevy dealership closed two years ago (they saw the demise of GM coming) GM did a buy back all of the store's new car and truck inventory - about 200 vehicles.
200 x $20,000 (average invoice price) = $4,000,000
If GM doesn't buy back these inventories the effected dealerships will be in even more trouble.
No, they have already stated they are not buying back cars or parts. They will instead help dealers try sell their stuff to other dealers. Neither GM or Chrysler will be buying anything back themselves. It would cost far too much.
I've been saying for 15 years that GM and Chrysler had to stop flooding the market with different versions of the same car under different brands. It's a terrible way to do business, trading increased market share via overproduction for lower profits and higher costs. To stay afloat, they have to be producing at capacity in all plants. It's freakin nuts.
The sad truth is they are not the only ones doing this.
Honda Accord = Acura TSX/TL
Honda Pilot = Acura MDX
VW Passat = Audi A4
VW GTI = Audi A3 = Seat
Ford = Mercury
Nissan Maxima = Infiniti G35
Toyota Avalon = Lexus ES or GS
This is so common in the car/truck industry. It saves them a ton of money and fools so many people into thinking they are getting so much more for their money when in fact they aren't usually.
Another railcar in the speeding train-----GM execs sold their stock the day before the announcement. They had the showing of the first 2010 Camaro at the local dealership this past weekend. We went, since there was supposed to be a cookout (no food left.) If this is what GM is hoping to revive their sales with, they are in bigger trouble than I thought. This particular car was built very sloppy.:twisted:
GM is renown here in the rural Midwest for having a dealership in every wide spot in the road. In the 70-mile, two-lane back-road trip between our houses there are two, both in towns of under 1000 population, both within 30 miles from true big city dealerships.
Chrysler is cutting into some serious meat in their dealerships; GM, OTOH, will be getting rid of hundreds of marginal operations that never should have been there to begin with. "1200" is a drop in the bucket.
But 2 weeks ago the Pontiac Buick dealer near my house closed down. The owner had passed on last summer and his estate pulled the plug on the operation after 40 years in business.
In the last 8 months a good number of GM dealers in Toronto have shut down. GM and Chrysler have not been alone. A growing number of dealerships both domestic and import have been calling it quits in the last year.
OMG, why? I have been driving one for the last few days from the State Motor Pool with 48,600-ish miles, and the rotors are warped, to the point that it sounds like a machine gun inside when you touch the brakes at 60 mph. The seats have completely killed my back over the last 2 days driving 600+ miles in the state. The average milage displayed in the radio I thought was a fine idea, but it was way off! it showed 30.8 mpg, but when refilling it today, it was actually 22.3 mpg.
I would not buy one used or new EVER! You have got to be able to find a used Honda Accord that will suit your needs better. You will not regret skipping over the Chevy!
Don't do it, it's just another GM P.O.S. in my opinion.
I agree GM and Chrysler need to cut back on everything including dealerships. Looking through the lists though it is sad. A lot of people will be affected by this. A lot of little towns that are shutting down all over the country from companies closing there doors. Tough times...
I have to admit a bit of Schadenfreude with the whole Chrysler/GM meltdown. I maybe am a bit too smitten with all of the wonderful Japanese cars that I have owned. I also have always loved my Ford trucks and think that Ford has always made good competitive cars (some p.o.s.'s too).
But the reality that people are going to be hurt has sank in with my great aunts pension being in jeopardy and small town dealerships closing.
The Gov has given GM 16 billion, now they are still going to file bankruptcy and say they will need another 30 billion------for what? Spend--Spend--Spend-----I've never seen that strategy work for anyone.:twisted:
I couldn't resist another comment, so bear with me. I bought a Trans Am, new, in 1979. I took it to the dealer for a persistent door rattle and you'll never guess what was causing it--------:-oa shiny Coke bottle. If this is GM's quality control in the stockholder days, what can we expect when it is owned by the government and the union? Stay tuned:shock:------P.S. I do like my Chevy truck
In today's Sunday paper was an article about GM's quality issues in 1979 with consumers reporting Coke bottles in their doors. Looks like mine wasn't an isolated case.
You're thinking of it wrong. It wasn't a Coke bottle in your door. It was a audible automotive mechanical repairman testing device... See, they were just testing the Auto Techs that would have to work on your vehicle. GM, thinking ahead all this time.
But seriously. I REALLY miss my 1979 Chevy shortbed with it's 350. That was a great truck. Would I trade my E for it? Nope, I've got older and have matured in my needs.
As (mkh) pointed out, wait tell the bill comes. We have been sold a real lemon in the government bailout programs. Hold on because the economic ride we are all about to take is going to make the Rubicon Trail look like a supper highway.
Terrific analysis of GM's issues and outlook was presented yesterday on To the Point, an NPR-distributed public affairs program. Guests included auto critic Dan Neil, industry analyst Maryann Keller (no true auto enthusiast doesn't know who they are ;-)) and labor specialist Richard Block. Segment is 35 minutes and begins at 7:40 in the stream.
They actually bought the Hummer Division. China's Sichuan Tengzhong Heavy Industrial Machinery Co. bought Hummer, GM will continue to manufacture them until my guess is they shift manufacturing over to China to save costs.
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