Shouldn't car dealers get something?By Keith Crain
DETROIT (Aug. 3, 2009)—You worked all your life, built up your business and maybe passed it on to your children, who in turn passed it on to their children.
It got pretty big. You sold a lot of cars and trucks for the factory and bought in on all the programs that came along over the years. You spent millions renovating your dealership or maybe built another building and moved the whole business so you could do a better job of serving your customers.
Then you got a letter. Sorry, we are terminating your franchise in three weeks or maybe a year and a half. That's it. No party, just sell your inventory and parts and good luck.
Sounds a little brutal, eh?
It was brutal and will be for a lot of General Motors Corp. dealers who are on death row.
Meanwhile, GM and Chrysler Group L.L.C. got billions, with a capital "B," from the U.S. government to help save their companies and jobs. The first thing they did was lay off thousands of workers and close thousands of dealerships across the country.
There is something wrong here.
Now car dealers are going to Congress asking for help. The government started this bankruptcy mess, so it seems that it might be able to help.
One thing is obvious. American automobile dealers have a lot of friends in the House and Senate. GM and Chrysler don't.
It's going to cost the new GM and Chrysler billions to find that out. Congress is going to do something to help the ex-dealers from Chrysler and the dealers from GM who are on death row.
Neither of those companies made a compelling case as to why those dealers were canceled. Congress may hold hearings and then act. Or it may simply help canceled dealers keep their franchises or be compensated. Sure, some dealers deserved to be terminated—but not in such a ruthless manner.
About the only thing Congress can do for Chrysler dealers is to have the company compensate them. But it can force GM to unwind its termination plans without creating chaos.
American automobile dealers are a powerful force in Washington, and they are going to demonstrate that fact to the two manufacturers. One way or another, it's going to cost the new GM and the new Chrysler.
Never underestimate the power of the American car dealer.
Keith Crain is chairman of Crain Communications Inc., parent company of Tire Business, and is publisher and editorial director of Detroit-based Automotive News, where this column first appeared.
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