Chrysler Dealers on the Chopping Block?

Friday, May 15, 2009

Local dealers may be especially hard-hit in the Chrysler bankruptcy. Mark Schienberg, president of the Greater New York Automobile Dealers Association, discusses the road ahead. And Jeff Bennett, reporter for the Dow Jones News wires, is covering the story for the Wall Street Journal.


Jeff Bennett and Mark Schienberg

Comments [24]

leslie from hohokus,nj

leaving chrysler dealers with the cars and parts is crazy. there is no need to bankrupt perfectly good dealers. putting more people out of business at this time when our economy is in crisis is not a smart move for anyone. It will not save chrysler closing down is a disgrace treating main street small business like they are a dot on a map and a piece of dirt. obama should be ashamed of himself. He has let the american public down.

May. 18 2009 06:10 PM
Jose from Hoboken

As a physician, personally my experience have been that end of life expense is first patient family member derived for the most part, second physicians, due to philosophical training are reticent to confront family members and argue for refusal of futile treatment due to the third issue tort and litigation. Just in the past year I have seen 3 lawsuits regarding end of life care: 1 family sue the family physician due to the fact that he did not diagnose prostate cancer in a 90 y/o, totally demented patient that died of Alzheimer's disease, another one was the family of a 93 y/o end stage heart failure patient that sued the cardiologist for not trying to give the patient ventricle reforming surgery and third another family of a 93 y/o end stage alzheimer's patient that sued because the new family doctor failed to pick up an old compression fracture when he saw the patient for the first time at the hospital for pneumonia a week prior to death. As long as there is no tort reform no doctor is going to expose her or himself to litigation if any type of treatment can be paid for and the family wants it, period. That is the number one cause for expense and the excessive suffering that I have to witness, as long as our society does not come to term with this issue the solution is going to be when, as a country, we go broke.

May. 15 2009 11:40 AM
Evan from New York, NY

Brian, 27 of 93 dealers in New York State, not NYC, are closing. It still stinks, but it's a little less extreme than you described.

May. 15 2009 10:46 AM
Withheld from You from Also withheld, coyly

During the downsizing waves of the 1980s & 90s, many companies which conducted mass firings wound up hiring back a lot of workers, but only after disrupting their own operations for lack of labor. Too “mean” plus too “lean” led to overworked personnel and strained productivity.

Is Chrysler doing a similar thing? Dismantling dealerships amounts to dismantling distribution infrastructure. Is it more or less expensive to dismantle a dealership rather than downsize its operations temporarily (which still hurts)? Suppose the Big Three start marketing good hybrid designs and sales really take off. Will they then find themselves grinding their gears and waiting for new dealerships to come online while foreign competition meets expanding demand?

How much of this retrenchment is necessary, and how much arises from a seemingly justifiable, but nonetheless erroneous, reaction to the current downturn?

May. 15 2009 10:39 AM
Phoebe from NJ

The US automakers pretty much deserve to fail, and my TAX DOLLARS should not be used to bail them out under any circumstances. Their products were geared toward cheap gas and overselling to people who could not afford the vehicles, and when gas increased and credit dried up they failed. Go figure!

My cars are German and Japanese, as they give good milage and are reliable. Had the US automakers ANY comparable products I would have looked at these, but none were available. So I bought from an overseas company. Having said that my Toyota has a greater "made in US" percentage than my prior Ford.

Also, the buying process from dealerships is horrendous: They are geared to overselling, overcharging and even when you enter educated with a pre-negotiated price the process takes hours. Their monopoly on distribution must be broken, so we can buy vehicles through other venues. Good riddance.

May. 15 2009 10:36 AM
johnjohn from NYC

These guys are complaining about government who is now a legitimate shareholder from influencing the company's policy. They are not saying that if the government had not stepped in, they would all be out of business!! I agree that as goevernment as the representative of all people are picking winners and loosers, obviously people are angry but let us have a discussion on that issue not the actions themselves.

May. 15 2009 10:29 AM
Dorothy from Manhattan

Chrysler had all those wonderful dealerships and went BANKRUPT. Well, duh, maybe the contraction of the business means you don't need so many dealerships.
And finally, Chrysler wanted government money but wants no strings attached. Next time they want money, just tell them to eat cake.

May. 15 2009 10:27 AM
burtnor from upper west side

IF not for taxpayer money, Chrysler would be OUT OF BUSINESS. We are now owners. How dare they complain that in return for saving their butts, we have opinions about how their failing business could be saved. These "free enterprise" types want it both ways -- take public money but do whatever they please without any transparency. You want the help? It comes with directions.

May. 15 2009 10:26 AM
Teresa from New York

is there another business model that can be used to keep dealerships open?

May. 15 2009 10:26 AM
doc from nj

Isn't this an example of the kind of executive decision-making which led to bankruptcy in the first place? The dealerships cost Chrysler no money (the dealers buy the cars, hire and pay their own staff, pay union dues, provide post-sales service without which no one would buy a car in the first place, and benefits the local community). What is the benefit to Chrysler (and to GM)?

May. 15 2009 10:26 AM
Ebun from Brooklyn

Pls tell the auto guy, without the govt chrysler will be dead

May. 15 2009 10:26 AM

The Free Market? If Chrysler were left to the free market they would have gone bankrupt in in November of 2008 and ALL the dealerships would be closed. HELLO!

May. 15 2009 10:26 AM
David from Manhattan

If automakers want MY TAX dollars to survive, then they have to change what created their demise in the first place. Being bloated and not surgically trimming fat and producing substandard cars FOR YEARS, is there fault! It's too late to complain about government oversight. You (Automakers) came to us with your hand stretched out! Don't complain...

May. 15 2009 10:25 AM
Tony from San Jose, CA

In France they sell cars in supermarkets. Why not shop for cars at Wallmart?

And why not Amazon?

For service, going to the dealer is a bad idea (too expensive).

May. 15 2009 10:24 AM

dealers are really dealer/service points. many dealers ONLY make their money on service.

if they are closing dealers won't reduced service (incl. tuneups, oil change etc) reduce the value of the car?

May. 15 2009 10:23 AM
Cory from Planet Earth

Auto manufacturers have plenty of expenses as a result of the care and feeding of dealers. They don't just buy cars. There is parts and warranty supervision and a host of other expenses. Cutting out unnecessary dealers is essential to cutting down those costs.

May. 15 2009 10:21 AM

Frank/6 great point. TV too.

May. 15 2009 10:20 AM
kai from NJ-NYC

What Chrysler doing is trying NOT to dilute their product stream. Consumers are now bidding DOWN prices (thereby depressing prices) when there are too is a concentration of dealerships.

At the end of the day, it is true that quality products are what really drives sales, but a glut of product and dealers do not help.

May. 15 2009 10:19 AM
Frank from NYC

New York is such a media capital that the closure of all these dealers is going to hurt all the people and companies that have relied on their advertising. Same's true in smaller cities where the local dealer is a much bigger deal. NADA says each dealer in NY market spends an average of $834,000 advertising.

Trickle Trickle

May. 15 2009 10:16 AM
Smokey from LES

If the dealers have to purchase the cars from the maker, why is it anyone's business how many dealers there are?

May. 15 2009 10:16 AM
Joe Corrao from Brooklyn

Alarm an alarm companies loses business cause Chrysler dealerships close...can't they find new business? they not have salesmen looking for more work? I am self employed and I constantly look for work.

May. 15 2009 10:15 AM
Nina from Montclair, NJ

If Chrysler had to go completely out of business ALL of the dealerships would be closed across the nation. This is a necessary cut to save the rest of the company.

May. 15 2009 10:14 AM
hjs from 11211

we are post peak oil. auto industry=dead man walking.
ask why no new refineries-we are in an age of transition.

May. 15 2009 10:13 AM

effect on Bluebook values?

May. 15 2009 10:06 AM

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