Logic doesn't soften the blow to auto dealers
This is a week for wakes and weeping in hundreds of automobile showrooms across America. It's a week for mourning the loss of dealers who have peddled Dodges or Jeeps or Pontiacs for generations, and who have supported untold numbers of Little Le...
This is a week for wakes and weeping in hundreds of automobile showrooms across America.
It's a week for mourning the loss of dealers who have peddled Dodges or Jeeps or Pontiacs for generations, and who have supported untold numbers of Little League teams and breast cancer walks along the way.
There is no way to put a happy face on Chrysler's move to eliminate 789 of its 3,200 dealers, announced Thursday, or General Motors' plan to eliminate 1,100 dealers, rolled out Friday.
Knowing this was coming, or rationalizing that it's all necessary in order for Chrysler and GM to survive, doesn't make it hurt less.
For many of us, this is personal and more than a little scary.
Some have relatives or friends losing jobs.
At my newspaper, companies such as Meadowbrook Dodge and Tamaroff Dodge -- both on Chrysler's closing list -- were regular advertisers. While it's certainly true that we keep our journalism separate from the details of how the Free Press actually stays in business, the fact is not lost on me that some of the advertising dollars spent by the Meadowbrooks and Tamaroff Dodges ultimately find -- er, found -- their way into my paychecks.
Not surprisingly, given the interconnectedness of auto dealers with so many lives and communities, this is also a week for fussing over those at death's door, trying to postpone the end for a few more weeks or months.
That's what the National Auto Dealers Association was doing Wednesday in Washington, as 150 dealers buzzed around Capitol Hill, trying to exert pressure to slow the cuts coming from Chrysler and GM.
But it was too little and way too late, of course, akin to fussing over a dying loved one with a terminal illness and asking for just a few more days.
I recall attending a meeting of auto mega-dealers in New York in 2006, when car and truck sales were 70 percent stronger than today's anemic pace, and being sobered by data about the value of dealerships by brand name. Lexus stores were the most valuable, followed by BMW and Mercedes, followed by Honda and Toyota, followed by Cadillac, etc.
And what about Pontiac, Buick, Chrysler and Dodge dealers? In many cases, they were worth no more than the real estate they sat upon, the experts said. And that was in a robust auto market.
This is also a week for grim humor, as people try to find a smile amid the sadness. "The buzz is that the next big glut will be of used-car superstores," one manager of a Michigan dealership told me, referring to the fact that some dealers who lose a Chrysler or GM franchise may try to survive solely on used car sales.
Soon, once this week of mourning has passed and the departed are laid to rest, attention will turn, as it inevitably must, to the future.
Surviving dealers will seize opportunities to boost sales and profits. They will recruit the top salespeople, best mechanics and service managers from the departed dealerships.
As long as people still want automobiles, people and companies will rise up to sell and service them.
It's the natural order of things.