OK, many of you were right, House breaks from Obama and sides with GM/Chrysler dealerships.

[Vic]

Originally posted by: Engineer

Originally posted by: Ldir
I still do not understand how closing dealerships helps automakers' profits. The dealers are privately owned. Virtually all of them must have sold enough cars to be profitable or they would have closed already. How does cutting them improve sales and profits?

It lowers inventories, gives pricing power (i.e. higher prices). Also, what people forget is the service aspect. Poor service departments can cost the automakers far more (in mis-repairs) than one can imagine. I recently took my 2007 Cobalt to the purchasing dealership for warranty work. After two times, they basically stated that they had fixed the car as good as they could and that it was now "fine". It was not fine. Another dealership kept it a few days, diagnosed the issue correctly the first time and fixed it. GM had to pay for 3 trips and one fix because of the bad dealership service department.

With that said, I'm not sure what criteria they are exactly closing these dealerships on. It was noted on CNBC that GM was closing 40% of dealers that account for 7% of sales.

Had a similar service problem with one of my Subarus. One dealership kept saying it was a faulty ECU (not a cheap item) and kept replacing them under warranty, to no avail. Finally took it to another dealership and the actual problem was a faulty throttle position sensor (a cheap item).

 

[ZeGermans]

Politicians of all spectra are willing to do anything if it pleases the large donors in their constituency.

 

[waggy]

Originally posted by: Engineer

Originally posted by: Ldir
I still do not understand how closing dealerships helps automakers' profits. The dealers are privately owned. Virtually all of them must have sold enough cars to be profitable or they would have closed already. How does cutting them improve sales and profits?

It lowers inventories, gives pricing power (i.e. higher prices). Also, what people forget is the service aspect. Poor service departments can cost the automakers far more (in mis-repairs) than one can imagine. I recently took my 2007 Cobalt to the purchasing dealership for warranty work. After two times, they basically stated that they had fixed the car as good as they could and that it was now "fine". It was not fine. Another dealership kept it a few days, diagnosed the issue correctly the first time and fixed it. GM had to pay for 3 trips and one fix because of the bad dealership service department.

With that said, I'm not sure what criteria they are exactly closing these dealerships on. It was noted on CNBC that GM was closing 40% of dealers that account for 7% of sales.

In theory thats why they are doing it.

But there have been enough stories that they are closing highly profitable dealerships over other reasons.

They had a dealer on (i think) CNBS that was the top in his state on top 10 in the western US. They were closeing him.

 

[Engineer]

Originally posted by: waggy

Originally posted by: Engineer

Originally posted by: Ldir
I still do not understand how closing dealerships helps automakers' profits. The dealers are privately owned. Virtually all of them must have sold enough cars to be profitable or they would have closed already. How does cutting them improve sales and profits?

It lowers inventories, gives pricing power (i.e. higher prices). Also, what people forget is the service aspect. Poor service departments can cost the automakers far more (in mis-repairs) than one can imagine. I recently took my 2007 Cobalt to the purchasing dealership for warranty work. After two times, they basically stated that they had fixed the car as good as they could and that it was now "fine". It was not fine. Another dealership kept it a few days, diagnosed the issue correctly the first time and fixed it. GM had to pay for 3 trips and one fix because of the bad dealership service department.

With that said, I'm not sure what criteria they are exactly closing these dealerships on. It was noted on CNBC that GM was closing 40% of dealers that account for 7% of sales.

In theory thats why they are doing it.

But there have been enough stories that they are closing highly profitable dealerships over other reasons.

They had a dealer on (i think) CNBS that was the top in his state on top 10 in the western US. They were closeing him.

Define profitable dealership? From car sales or simply from "overservice"? GM pays the dealership for service. My above example shows that the first dealership that I went to was paid two times for the service and didn't fix the issue. I would assume that they would indeed make a profit if they charged for every service visit twice (paid by GM warranty service, that is).

 

[umbrella39]

Originally posted by: BoberFett

Originally posted by: Genx87

Originally posted by: Marlin1975
FYI Seems republicans are pushing this not Dems. In fact Reid is trying to slow it down.


"Senate Majority Leader Harry Reid, D-Nev., said earlier in the week that the issue was not atop his agenda, setting up a potential roadblock. Reid spokesman Jim Manley noted Thursday that Sen. Charles Grassley, R-Iowa, has introduced a similar measure and said Reid would monitor the legislation's progress."

Really, the party affiliation doesnt matter. The fact it is even being brought up does. We gave politicians the keys to GM. Now they are playing. Frank already meddled once, now this debacle.

And if this passed the house that means Democrats had to vote on it as well.

You are wrong. It's the Republican stranglehold on all three branches that killed this country.

Fixed. The dems are just trying to clean up the mess (and not doing such a good job so far). But they should be given just as much time as the previous fools were afforded. It didn't get fucked overnight.

 

[Genx87]

Except the Republicans enjoyed no such "stranglehold".
2 years of 8 under Bush, Republicans had a strong majority.

And No I dont believe because one party fucked up the other party should be given the same amount of time to do equal or more damage. That is the definition of insanity. Doing the same thing over and over hoping for a different result.