Chrysler planning to eliminate 789 of the 3200 dealerships after receiving bail out money?

Chrysler planning to eliminate 789 of the 3200 dealerships after receiving bail out money?

Why spend billions on a corporation that was gonna eliminate jobs anyway? Now we're in debt and have job cuts.
"Why spend tax payer money on a company that laid off people anyway?" I thought that was pretty obvious, Apprently not. Dee-deedee!
The Rest of you, Thank you for your cogent, well thought out answers.
Emiller1- You have no idea of my mentality. Economics is not my area of expertise, however it seemed to me that someone could have predicted this prior to the tax payer money infusion. I feel if the public had known this prior to the bailout, the circumstances surrounding the bailouts perhaps would have been different. But according to one answerer, this "was" part of the original plan. I don't pretend to know everything, perhaps you shouldn't either.

Asked by: Buck J @ 2009-05-14 15:02:14

[Best Answer]I believe the thinking was to save as many jobs as possible by allowing the company, as a core, to survive. You have to remember that while these bailout funds were given out, I'm sure much work was done to try and predict what effect it would have, there obviously would be no guarantee of the safeguard of all jobs. If it was that easy, do you really think there would be any businesses that failed? Sure, some jobs are going to be lost and I do sympathize with those that are affected, it could have been much worse. And that's without the entire story having played out yet.

To add to my answer, many people when they think of the auto industry, they don't think of the big picture. They simply think of the assembly plants in the midwest and the dealerships. The auto industry is a lot further reaching than that. You have to think of the suppliers that provide parts to the assembly lines, the trucking companies that make their living off moving those parts from the suppliers to the assembly plants, the companies that provide the raw materials to those suppliers, etc. There's many layers of the industry that contribute to the big economic picture of the auto industry in America. While, ideally, it would have been great to not have any jobs lost at any level in these corporate structures, it's just not realistic with the realities of the downturn. I believe that the actions taken has switched the possibility of jobs lost to being in the hundred thousands in this industry alone, when it could have feasibly been in the millions or so had 2 of the "big 3" auto makers been allowed to fail without assistance.

By : Shawn C @ 1242339161

Answers ::
So what's your question, genius?

Tom J

I believe the thinking was to save as many jobs as possible by allowing the company, as a core, to survive. You have to remember that while these bailout funds were given out, I'm sure much work was done to try and predict what effect it would have, there obviously would be no guarantee of the safeguard of all jobs. If it was that easy, do you really think there would be any businesses that failed? Sure, some jobs are going to be lost and I do sympathize with those that are affected, it could have been much worse. And that's without the entire story having played out yet.

To add to my answer, many people when they think of the auto industry, they don't think of the big picture. They simply think of the assembly plants in the midwest and the dealerships. The auto industry is a lot further reaching than that. You have to think of the suppliers that provide parts to the assembly lines, the trucking companies that make their living off moving those parts from the suppliers to the assembly plants, the companies that provide the raw materials to those suppliers, etc. There's many layers of the industry that contribute to the big economic picture of the auto industry in America. While, ideally, it would have been great to not have any jobs lost at any level in these corporate structures, it's just not realistic with the realities of the downturn. I believe that the actions taken has switched the possibility of jobs lost to being in the hundred thousands in this industry alone, when it could have feasibly been in the millions or so had 2 of the "big 3" auto makers been allowed to fail without assistance.

Shawn C

Number of jobs means nothing.

The government could spend $10 billion paying every unemployed man, woman and child in America to rake leaves and mow their own lawns, but it still wouldn't create a more productive economy and get us out of depression.

The short answer is that government sucks. If you want the long answer, read some unbiased books on economics, business, and politics.

kurtiz_j

That was always part of the restructuring that the US Treasury Dept approved of.It will get worse before it gets better with at least 5 assembly plants that will be closing.Some of those dealerships have other brands besides Chrysler and will still be in business.

toledojeeper

because consumers arent buying enough cars from them, so they're basically losing money to keep these dealerships open. instead, chrysler should use the money to start building solid car lines here in the US that consumers will want to buy, thereby creating a strong american manufacturing base, quality cars at a lower price, and then sell dealership franchises. also, they should cut down on executive perks, benefits, salaries, etc. and stop sending manufacturing jobs out of the country.

Andel

See, this is what happens when children discuss economics. The idea behind the bailout was to get Chrysler to come up with a plan to be more viable in the marketplace without having to shut down. The closure of dealers, factories, and other facilities was part of the plan. The alternative was to close down Chrysler completely, eliminate all its jobs, all the jobs of its suppliers, and watch helplessly as all its assets were sold to the lowest bidders.

Me again

So don't bail them out and then all the jobs and dealerships close.

You have the UAW mentality. You would have everybody lose their jobs than just a few.

emiller1998

According to the MSNBC power lunch program pundits, the news channel looked into the rationale of eliminating 789 dealerships. According to the report their are 60 employees per dealership, this will eliminate upwards of 147,000 jobs across the country. Both GM and Chrysler have an extensive number of dealerships, which requires greater inventory and resources to pay employees. A business model no longer relevant. They went on to say, Acura has a limited number of dealerships, fewer cars on the lot, fewer employees. This is the model GM and Chrysler must transition too in order to better meet supply and demand, moving forward.
To your question, cutting one of four dealerships from coast to coast is extraordinary. Make no mistake, this is a darwinian mandate, only the strong survive. No longer can Chrysler sale 1/8 th of what Toyota sells in a year, which were regularly Chrysler sales figures and this performance level be acceptable. The use of bailout monies is to spare closure of the entire company. If the government did not step in, clearly closing GM and Chrysler completely would be a problem of biblical proportions.

mark_hensley@sbcglobal.net

Why did GM, Chrysler wait until the last minute to make better cars?

Did they hurt themselves by doing so? Didn't they see how Honda and Toyota sells you think they would have tried sooner.

Asked by: tropics11 @ 2009-05-14 20:57:57

Answers ::
What makes you think they are making better cars? Honda and Toyota have always sold a quality product. They should have woke up about 20 years ago.

Bethany J

because they are run by a bunch of old geezers that think just because they put a buy america stick all over the place that it will make ppl buy american cars.
some of the current lineup is very nice but they spent to much time marketing the suv and when gas went up and suvs stop selling they had no small car lineup to turn to.

Andy H

Well, from experience Chrysler and Dodge made some horrible cars as far as engines and transmissions go. That's the reason why Americans start buying them. Not only do Honda's, Toyota's and Nissan's LAST longer, they had more of a stylish theme to them. I have no idea what GM's agenda was in the age of the Civic and Maxima. It's like, lets just make cars with the same styles and the worst engines (with no warranties and a thousand recalls) and see what happens.

vic s

It takes about 3 or 4 years of development to bring a new vehicle to market. No automaker can suddenly make a better car quickly: it takes time. The improvements that have been occurring with GM and Chrysler started much farther back. In the 80's, Chrysler reduced development time and costs by partnering with Mitsubishi, and used a lot of Japanese engines in their smaller cars, and even though Mitsubishi is Japanese, their stuff isn't the best. Chrysler later developed better engines, and better vehicles. The Dodge Ram was truck of the year in 1994. The Intrepid was one of the first vehicles to use a CFC-free refrigerant system. The Chrysler 300 made Car&Driver's 10 best list. The new Ram Truck makes more horsepower than other brands, has a cylinder deactivation system to save on gas, and is the only truck with a coil sprung rear suspension. Next year the Ram will be available as a hybrid. A lot of this development was going on in prior years.

Last year the title of green car of the year was awarded to the Chevy Tahoe hybrid, which gets the same city fuel economy as a 4 cylinder Camry. This year, the new Malibu was ranked highest in initial quality of all midsize cars by JD Power, beating out the Mercury Milan which had owned that title for the 3 previous years. JD Power also ranked Buick as the highest quality make of cars.

Automakers still produce large vehicles because that's what Americans choose to buy. The Ford F-150 still outsells every vehicle on the road, and sales of the Toyota Prius have dropped as fast as gas prices.

Ryan M

What Ryan said.

C-Tech

I have been buying GM and Chrysler vehicles for 35 years and never had any problems with them.I had a few with over 150,000 miles and even had a Dodge Ram with over 400,000 miles.Your question is just your opinion,I have no problem with GM and Chrysler quality.
As for Toyota,if they are selling so well why are they also borrowing money from the Japanese Government.They lost $7.7 billion in the first 3 months of this year and expect to lose $5.7 billion next year.

toledojeeper

Question About Chrysler going bankrupt........?

How will this effect thoes of us who drive dodge cars and trucks??? Also i have heard it will be hard to get parts..is that true??

Asked by: sugar_n_spice @ 2009-05-14 18:28:40

Answers ::
There are so many parts out there that we will have enough for the next 5 years at least. No worries.

Mike

It will not affect you at all. They are reorganizing not going out of business. The will fewer dealers and hopefully a better run company. There will still be parts and service so you probably will not see any difference..................ms

Uncle Jed

When the government shuts down about 800 dealerships, yes it will be hard to get parts becaue 800 businesses across the U.S. that kept those parts in stock will be closed. Right now Obama is saying the government will stand behind the vehicles. If you believe that, I have a bridge to sell you.

Bethany J

Bethany J. is stupid.

C-Tech

727 Transmission??????

I am 15, 3 months away from my license and I am a big Mopar fan. Within the next three months I am going to be looking for a 70-74 Duster or Dodge Dart. I am looking to find one with either a 318, 340, 360 (probably the 318) which is not a problem for about 6000 dollars, then putting a Holley 750 cfm Carb, Edelbrock Intake, a bigger cam, bigger heads etc. However none of the cars for sale I look at ever have 4 speeds, all they have are the 3 speed 727 automatics. Do these transmissions drive well with a performance set up? If you are just driving around with it in drive about what rpmd do they shift at? And will not having a fourth gear slow me down, because I wanna see the look on my friends face when the 40,000 dollar Audi A8 his daddy bought for him gets blown to pieces by a 10,000 dollar Mopar which I did much of the engine work on?

Asked by: ............... @ 2009-05-15 08:09:37

Answers ::
727 transmissions when rebuilt can handle even the 426 hemi.

That is a solid transmission.

S&N

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dfsg

The old 727's were almost bullet proof.

badbill1941

Just buy a modern car and forget about that old junk that's three times your age!

Johnny C

If you have a family member that worked at one of these eliminated dealerships, will you ever buy a Chrysler?

NEW YORK – Chrysler LLC wants to eliminate roughly a quarter of its 3,200 U.S. dealerships by early next month, saying in a bankruptcy court filing Thursday that the network is antiquated and has too many stores competing with each other.

The company, in a motion filed with the U.S. Bankruptcy Court in New York, said it wants to shed 789 dealerships by June 9. Many of the dealers' sales are too low, the automaker said, with just over 50 percent of dealers accounting for about 90 percent of the company's U.S. sales.

Dealers were told Thursday morning through United Parcel Service letters if they would remain or be eliminated. The cuts are likely to devastate cities and towns across the country as thousands of jobs are lost and taxes are not paid.

Chrysler Vice Chairman Jim Press called the cuts difficult but necessary. He said the list of dealers is final and there will be no appeal process.

Asked by: Michelle M @ 2009-05-14 14:40:37

[Best Answer]They have to do what they have to do to stay in business,it will be worse for GM dealers.I live in Toledo,OH and 10 years ago the Jeep plant had almost 6000 employees,today the plant has around 1600 employees that don't know when they will go back to work.The city of Toledo is so devastated they have to layoff 150 police officers and the gangs are getting ready to take over the city.
Some of these dealerships sell other brands beside Chrysler and will still be in buisness.

By : toledojeeper @ 1242339009

Answers ::
I wouldn't and won't they made defective engines, they knew about a design flaw in there 2.3 engines, but put them in vehicles anyway.

James B

i can't believe i just saw an ad for Jeep on TV

Murzy

They have to do what they have to do to stay in business,it will be worse for GM dealers.I live in Toledo,OH and 10 years ago the Jeep plant had almost 6000 employees,today the plant has around 1600 employees that don't know when they will go back to work.The city of Toledo is so devastated they have to layoff 150 police officers and the gangs are getting ready to take over the city.
Some of these dealerships sell other brands beside Chrysler and will still be in buisness.

toledojeeper

It brings tears to my eyes that families are faced with such devastation. I wish I could do something about it. I am so sorry for the heartbreak out here. This is flesh and blood, lives of families who had years and years of a way of life. I don't believe Chrysler LLC doesn't have a choice in the matter. If I had a family member caught up in this mess would I buy a Chrysler? Perhaps, I would, I could still have family and friends who are a part of Chrysler after the dealer cuts, I would not want them to suffer the same fate. Assuming Chrysler is building a car I would want to put down my hard earned cash, maybe so.

mark_hensley@sbcglobal.net