List of Metro Detroit Chrysler Dealerships that are set to close

[econ expat]

OK, let's try it this way. I'm going to use a couple of Chevrolet dealers, but it's a good example of the problem.

Omak, WA is the largest city in Okanogan County, with a population of about 4,700 people in a county of about 40,000. It has a Ford/Mercury/Dodge/Chrysler/Jeep dealer, and a Chevrolet/Buick/Pontiac dealer. That should about cover the county, right? So why, for pity sake, 24 miles up the road is there another Chevrolet dealership in Tonasket, WA, population about 1,000. Who is OK Chevrolet in Tonasket competing against? Not Damskov Ford/Dodge/Jeep, but Sunrise Chevrolet.Buick in Omak, thus making the Omak dealer weaker. One of GM, Chrysler and Ford's problems are their dealers are stealing customers from themselves, not from other competing dealers.

It don't have to be that way, indeed those dealers are stabbing each others.
But its STIL win win win for the manufacturer.
Why?-
Say there are 3 Chrysler dealers near each others. A car shopper interested in a Chrysler stops at the dealers, then chooses from one of them. Now if those dealers targeted Ford or Chevy shoppers, the odds are less that they will close a deal. After all, those shoppers were not originally looking for a Chrysler product.
So Chrysler DOES come out ahead- the Chrysler shopper finds a deal/ dealer and buys a Chrysler anyways, since there was more than 1 dealer to choose from.
Now personal experience, though it goes back 30 years. My grandfather owned a Ford dealer in a small midwest town pop. 1,000.Had been in the family 62 years, assigned personally by Henry Ford. In a 2 county area, population 20,000 there were 5 Ford dealers. My cousin and I were being trained to take over that dealership. BTW we did not/ could not steal customers from the other towns. In a small town, you better run a reputable business, of any kind- and we all did.
Our place was paid for, and turned a profit, and we had 12 employees.
Ford wiped us and 2 other dealers out within a year. The zone rep tried to get us all to merge, and build a new facility 'on the highway', not in a downtown.
At that time, we had about 75% of the car market in our town. Grandfather refused to back us with the buyouts and new building[[don't blame him). To keep the jobs after we lost the Ford sign, he put up a Dodge sign. 1979- what does that tell you about what we had to sell? Within a year we bailed- in a small town you can't sell junk like those late 70's Dodges.
Forward 30 years. Small farm towns, ya gotta love em'- very few Toyotas or Hondas. But also very few Ford's. There is a Chevy Dealer surviving in that area, and he sells alot of cars. All 5 Ford dealers are gone. Those of us that won all the sales and service awards were dispensible.

[econ expat]

OK but consider the source.
Anyone who has ever run a business small or large should know how much is needed to bail out a business and return it to profitability.

Yet the bail out loans lasted how many weeks[[or days?)

Dealers get billed for all the support services, it hasn't been free for a long time.

GM CFO Ron Young was on Paul W. Smith this morning and answered this question. Here are his reasons why more dealers cost more.

1. Information technology systems for the network
2. Dealer and salespeople incentives
3. Field sales service and training support
4. Service parts support
5. Local advertising
6. Weak dealers force GM to offer more incentives in the marketplace. These incentives must be given to every dealer in the country

http://wjrpodcasts.com/podcast/paulw...ung-060409.mp3