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Obama Administration Cuts Two DeVos Car Dealerships
#31
This is not a Republican/ Democrat disagreement. This is from another Democrat congressman.

Press Release Media Contact:
Marion Read 202.225.3665

ARCURI CALLS ON OBAMA ADMINISTRATION TO PROTECT LOCAL SMALL BUSINESS CAR DEALERSHIPS FROM CLOSURE
Local Congressman Fights On Behalf of Area Small Businesses and Jobs
May 14, 2009
Washington, DC -- Following a meeting with local auto dealers yesterday, U.S. Rep. Michael A. Arcuri (NY-24) called on U.S. Treasury Secretary Timothy Geithner and National Economic Council Director Lawrence Summers today to take immediate action to delay General Motors and Chrysler’s plans to close thousands of small business car dealerships across the country.

“We cannot allow large corporations to achieve financial stability at the expense of local small businesses,” Arcuri said. “It is imperative that the restructuring of these huge corporations does not leave local small businesses bearing most of the economic strain. I have yet to see any evidence that closing dealerships will positively impact the bottom line for these large corporate automakers. As independently-owned small businesses, auto dealers are a critical part of the local economy and are entitled to legal protections. GM and Chrysler have a responsibility to honor their partnerships with car dealerships, and they must be held accountable.”

This week, GM and Chrysler announced that they would be closing auto dealerships across the country as part of their restructuring plan. The specific dealerships to be closed have not yet been designated. Today, Arcuri sent a letter to Treasury Secretary Geithner and Director Summers to explain the negative impact that these sudden closures would have on the economy of New York State and to request that the plan put forward by GM and Chrysler for immediate dealership closures be delayed.

Auto dealerships are major contributors to the Upstate economy, bringing in huge revenues and employing thousands. In New York State, the average sales dealership earned $31 million in 2007, while employing almost 50,000 workers statewide. These positions typically pay twice the national average of other retail-sector jobs. Automobile dealerships are independently-owned businesses with dealers paying for their own inventory before cars even leave the factory. Dealers also pay for the parts used in repairs in advance, and cover all costs of training and diagnostic equipment.

Together Secretary Geithner and Director Summers chair the Presidential Task Force on the Auto Industry. Summers also serves as the Assistant to the President for Economic Policy.

Below is the text of the letter sent to Secretary Geithner and Director Summers:


The Honorable Timothy F. Geithner
Secretary
Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220 The Honorable Lawrence H. Summers
Director of the National Economic Council and
Assistant to the President for Economic Policy
The White House
Washington, DC 20500

Dear Secretary Geithner and Director Summers,

I write in concern over General Motors (GM) and Chrysler’s plans to immediately close select auto dealerships across the nation in efforts to contain costs and become financially stable. As my district reflects significant auto and small business interests, I respectfully urge you to take into account the future well-being of GM and Chrysler dealerships as their holding companies resolve their bankruptcy and restructuring processes, and urge an imminent delay of these closures to reassess GM and Chrysler’s methods and justifications of these actions. It remains unclear how closing dealerships would contribute to the future viability of GM and Chrysler when the current financial relationship between these holding companies and dealers already appears to serve the interests of the manufacturer. Additionally, Chrysler’s status under Chapter 11 bankruptcy would permit it to set aside its legal obligations to honor franchise agreements under New York State law governing manufacturer termination of franchise contracts.

Auto dealerships are large contributors to the health of the economy, bringing in huge revenues and employing thousands. In New York State alone, the average sales dealership earned $31 million in 2007. Additionally, all-new vehicle dealerships averaged total sales of $34.5 billion while employing almost 50,000 workers statewide – or 10.5% of the state’s total payroll. These positions typically pay twice the national average of other retail-sector jobs. Dealers have also invested about $233 billion to create an auto sales network that provides a vast distribution and service channel for consumers. These franchise dealer networks specifically lower customer costs, outsourcing virtually 100% of the fees incurred by selling and servicing cars.

I commend you and thank your Administration for their efforts to help our nation’s automotive industry survive the tough economic conditions of the past months. However, I ask that you use the federal government’s stake in GM and Chrysler to review the economic consequences of sudden dealership closures, and to consider that the actual long-term costs of these actions may be greater than the proposed benefits and savings. Automobile dealerships are independently-owned businesses bearing all operating costs. Dealers pay for their own inventory before cars even leave the factory, pay for the parts used in repairs in advance, and cover all costs of training and diagnostic equipment.

Given these outstanding issues, it is in the best interest of our country’s dealerships and manufacturers alike to delay these planned immediate closures in order to better assess the actual advantages and real losses of closing thousands of small businesses in a short timeframe.

Thank you for your attention to this matter. I look forward to working together to revive this country’s auto industry and restore it to its place as one America’s great industries.

Sincerely,

MICHAEL A. ARCURI
Member of Congress
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#32
I never said it was a republican/democrat issue. What is - is the way you are presenting it, like your headling implying Obama, or the Obama Administration, is somehow directly coordinating it. Like your linking and quoting to articles that are saying this is Obama doing this, but not linking to articles that talk about it being a GM/Chrysler decision. Like your linking to these letters asking for explanations, but not linking to any letters giving explanations.

It's not a political issue. You however are making it one.

As I said, GM & Chrylser need to better explain their reasoning, both to the public and the dealers, and it would be politically smart for someone in the government to do the same, both to the public and esp. fellow reps.
 Reply
#33
You want me to prove your case, that closing these dealerships is a good thing for the economy? If you can find anyone who thinks this is a good thing, YOU find it. And YOU post their reasoning here. Don't just post some off the cuff quip from a supposed expert. Show us in dollars and cents how higher priced cars located a longer way from potential consumvers is going to help GM/C sell more cars.


BREAKING NEWS... Hot Off The Wire:

GM and Chrysler have just offered their explanation:

"The Obama administration won't give us any more money unless we do this."
 Reply
#34
As much fun as this thread is, I will offer this point.

When the US government holds a significant share in a company or companies....regardless of who is office...it is and will be political.

With the track record of our government and their inability to run anything efficiently...it should give alarm to all who are involved..unfortunately this is a lot of people. This track record is most definitely a government thing...no partisan by any stretch.
It is only through labor and painful effort, by grim energy and resolute courage, that we move on to better things. --Roosevelt
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#35
MichMan Wrote:You want me to prove your case, that closing these dealerships is a good thing for the economy? If you can find anyone who thinks this is a good thing, YOU find it. And YOU post their reasoning here. Don't just post some off the cuff quip from a supposed expert. Show us in dollars and cents how higher priced cars located a longer way from potential consumvers is going to help GM/C sell more cars.


How about YOU find the figures showing it will cost GM/C money and is a bad thing? Please, I want the analysis and projections on it's expected influence on cars sales, and most importantly PROFITABILITY.

MichMan Wrote:BREAKING NEWS... Hot Off The Wire:

GM and Chrysler have just offered their explanation:

"The Obama administration won't give us any more money unless we do this."


I just googled your "quote" and the only place it come up was on this site. Since you've resorted to making things up, I assume that means you have zero evidence at all this came from the Obama administration?
 Reply
#36
Quote:With the track record of our government and their inability to run anything efficiently...

Just as an interesting aside, do you actually have any data to back up this claim? Or is it just a belief, an opinion?
 Reply
#37
ibofightback Wrote:
MichMan Wrote:BREAKING NEWS... Hot Off The Wire:

GM and Chrysler have just offered their explanation:

"The Obama administration won't give us any more money unless we do this."


I just googled your "quote" and the only place it come up was on this site. Since you've resorted to making things up, I assume that means you have zero evidence at all this came from the Obama administration?


It was a joke. Have you lost your sense of humor, or were you born without one?

Next time I will add a smiley face just for you.

Secondly, how about this- If you believe that closing these dealerships is a good idea then YOU provide your reasoning why. And if you make a statement then YOU back it up.
 Reply
#38
ibofightback Wrote:
Quote:With the track record of our government and their inability to run anything efficiently...

Just as an interesting aside, do you actually have any data to back up this claim? Or is it just a belief, an opinion?

Well, I think purchasing 10,000 dollar hammers is a great example. Flying Airforce One 100 miles for a conference is another.

Our welfare system is very inefficient. The toll roads that local governments run. In Massachusetts, it was reported that only $4 of every $100 is spent on actual highway expenses. 70% of that budget goes to paying the people that work there.

The entire Californian government...simply because it is 15 billion in the red...is another example.
Last example..in the recent stimulus package..there was something like 75 billion that went out that admittedly did not need to and was wasted. Or the shear lack of accounting of the stimulus money.

The biggest problem with our government these days, in my opinion, is they are reactive (usually of the knee-jerk type).
It is only through labor and painful effort, by grim energy and resolute courage, that we move on to better things. --Roosevelt
 Reply
#39
MichMan Wrote:It was a joke. Have you lost your sense of humor, or were you born without one?


My sense of humour with regards you making claims and then refusing to back them is long since lost

Quote:Secondly, how about this- If you believe that closing these dealerships is a good idea then YOU provide your reasoning why. And if you make a statement then YOU back it up.

I have no idea whether it's a good idea or not, I'm not making any claims either way. I am however assuming that there's some smart people who know a lot more than you or I about the area that have made the decision. They may still be wrong, but I'm not going to attack their decisions when I know they know a hell of a lot more than I do about the topic.
 Reply
#40
All feel the pain as car dealerships go

Outside Michigan, dealers put a face on the industry's agony

May 26, 2009 • From Lansing State Journal (Lansing is Michigan's state capitol)

That's because in many towns, auto dealerships are family-owned businesses with hopes and dreams tied to the welfare of the community they serve.

Car dealers sponsor Little League and recreational softball and high school activities. Car dealers advertise - and not just with television and newspapers. They spend money with local theater playbills and church bulletins and high school yearbooks and athletic team programs. They sponsor festivals and events.

Car dealerships provide good jobs in many communities - PBS' Newshour reported an average of 45 employees per dealership.

/snip

The loss of dealerships, though, makes the rest of the country notice just how wide the auto industry's ripples are. The state of West Virginia expects to lose 17 of 24 Chrysler dealers. In suburban Chicago, communities that rely on local sales tax revenue are tallying the losses from some 20 Chrysler dealerships.

The National Automobile Dealers Association estimated last week that the loss of nearly 800 Chrysler dealers this summer and 1,100 GM dealers by 2010 will eliminate more than 100,000 jobs nationwide and "billions of dollars in sales tax revenues for towns, cities and states."



http://www.lansingstatejournal.com/artic.../OPINION01____________________________________________________________





Automall told to shut its doors
(by D.R. Foster - May 27, 2009)


In the midst of federally-backed bankruptcy proceedings, Chrysler announced the closing of 789 dealerships nationwide and 30 dealerships in New Jersey, including the Stadium Auto Mall on Route 17 North in Rutherford, which sells the manufacturer's Chrysler and Jeep brands.

In a brief but emotional phone call, Stadium Auto Mall dealer Phil Bellettirie would not comment on the future of his dealership.

"There is so much negative press about Chrysler," Bellettirie said. "I have no comment; there is just nothing to say."

With little or no advanced warning, owners of the dealerships on the chopping block were notified of the termination of their franchise contracts by Chrysler. The dealerships have until June 9 to continue operating under the Chrylser banner. After that date, they will have to take down their signs. The automaker does not plan to buy back unsold inventory from the affected dealers, a move which could leave some owners in financial ruins. Even if the dealers elected to remain in business with their remaining inventory, they would have to sell those cars as "used" in the absence of a franchise contract with Chrysler.

Jim Appleton, president of the New Jersey Coalition of Automotive Retailers (NJ-CAR), a trade association that represents the interests of retail car dealers, called Chrysler's move a "smokescreen" that would harm the Chrysler brand in both the short and long terms.

Appleton said that retail franchisees are actually a tremendous source of revenue, and little or no cost to automakers. Franchisees pay automakers in advance for vehicles and parts, as well as for specialized tools and training needed to conduct repairs on the vehicles. Franchisees even pay for the right to put up brand signs on their lots.

"How then does chopping a customer-and that's what these dealerships are for Chrysler, customers-how does that help the manufacturer emerge from bankruptcy?" Appleton asked. "It's …meant to make it look to the public like they are going to chop this company up and restructure it and make it viable, when in fact they are going to restructure an external distribution network that is responsible for 90 percent of their revenue."

Appleton offered the following analogy: "It is as if a pharmaceutical company, facing financial straits, said that they were having trouble selling their drugs, so they wanted to close down 25 percent of the Walgreens in the country. The idea is laughable."
/snip

Barack Obama has signaled that the federal government will back the warranties of both Chrysler and GM-which is in similar financial straits-through a Warrantee Commitment Program.

But the guarantees are not enough for one long-time Chrysler owner. Fifty-eight-year-old Dieter Drews of West Gouverneur Avenue in Rutherford said that he and his wife are on their third Chrysler Town & Country Minivan, a car they have had for nearly 10 years. But while he raves about the gas mileage and seven-person seating-capacity of the van that has taken his family to Florida and back, Drews says he won't buy another Chrysler.

"I don't trust them, I think they're going down," Drews says. "If I get another van, I'll get the Honda [Odyssey]."


http://www.southbergenite.com/NC/0/2626.html
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