REPORT: Slighted dealers line up to criticize Chrysler tactics
A story in the New York Times shines a light on some reasons for the Committee of Chrysler Affected Dealers to challenge the car company's bankruptcy efforts. The element common to all of the dealers profiled is that they did extraordinary things Chrysler asked them to do, such as buy too many cars and combine franchises at their own expense, only to find out they had been chosen for termination after bankruptcy.
Chrysler isn't buying back the inventory that sits on dealer lots -- inventory that, in some cases, Chrysler specifically asked dealers to take too much of in order to help make the company look better for sale. Banks have also dropped many dealers because they no longer have new-car franchises, making it even harder to sell the cars they have.
Until a few days ago, the dealers were told they had only until June 9 to liquidate everything. However, an exchange between Senator Kay Bailey Hutchison (R-TX) and Chrysler President Jim Press has lead to an assurance from Press that dealers will "receive a fair and equitable value for virtually all of their outstanding vehicle and parts inventory," and that former franchisees would "receive a daily report which specifically outlines each unit of inventory and its place in the transition process." The suggestion was also that this would be the case after June 9.
Meanwhile, dealers who spent millions of dollars to show their commitment to Chrysler, only to be unceremoniously cut, will continue to fight their cases in court and on the showroom floor.
[Source: NY Times]
Reader Comments (Page 1 of 3)
Aubs 1:17PM (5/24/2009)
The car business is one shady business. This shows they're all liars and thieves, even up to the corporate level apparently. I'm shocked that any of this was a surprise to the dealers. They had to know what was coming.
These dealers lost their floorplans at least a month ago according to my Manheim welcome screen. So even those that have survived will have to do without Chrysler Financial, which is going to make things tough I think. Can't imagine MAFS provides rates that were as competitive as those from the manufacturer.
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letstakeawalk 1:52PM (5/24/2009)
IMHO, the only thing shadier than a car dealer is an auto insurance company.
Jared 2:02PM (5/24/2009)
Image what kind of business it would be if you didn't feel like every penny you spent at a dealership was stolen from you? Image if it was a crystal clear business where you don't have to wheel and deal and you arn't taken advantage of because of a lack of automotive knowledge.
Tool 4:51PM (5/24/2009)
The Chrysler dealers completely trusted Jim Press and did whatever he asked. Buy more cars to save Chrysler. Add another brand so that you carry all 3 Chrysler Brands. Invest more in your dealership. And they did.
Jim Press is the ultimate d-bag, c-sucker in this business. Anyone who worked with him would tell you privately that this guy plays this "awe-shucks" personality, then does whatever will serve his career.
KT 6:40PM (5/24/2009)
" Can't imagine MAFS provides rates that were as competitive as those from the manufacturer. "
I'd bet 99% of AB readers have no idea who MAFS is or what they do (btw, its not mass air flow sensor). MAFS would never be able to take on that much business at any rate. They wouldn't want that kind of exposure when they are trimming expenses themselves all the way up to Cox.
It's already getting hard to sell any Chrsyler products in the wholesale market. About the only thing people are willing to bid on are Jeeps.
Hopefully the Chrysler will actually help these dealers dispose of the inventory and not whore the market too badly.
Smegley 1:57PM (5/24/2009)
I wonder if anyone has compared the list of kept-vs-terminated dealers to the lists of political contributors to see if there is any correlation. When a crappy government like ours (and not a free market) is selecting the winners and losers, politics is ALWAYS involved.
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Zach 9:03PM (5/24/2009)
Wow. Get over it.
brucec32 2:05PM (5/24/2009)
In a way this is kharma coming back at the guys who spent years doing this to consumers. Not fair, but they weren't always fair, either.
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BigWill 2:30PM (5/24/2009)
"... an assurance from Press that dealers will "receive a fair and equitable value for virtually all of their outstanding vehicle and parts inventory,"
That's interesting. I'm wondering if this is another Jim Press lie because there didn't seem to be excess funds sloshing around within bankruptcy court allocated to buy inventory and parts off the old dealers.
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Tool 6:02PM (5/24/2009)
Yeah, I'd like to know how Jim Press and the New New New Chrysler is going to help these 'rejected' dealers out after June 9th.
I wonder, since Press is not likely to be part of the New New New Chrysler, how he can even make this promises?
PaulPaul 2:54PM (5/24/2009)
I wouldn't pay $1000 for a new Chrysler
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halogenrepublic 3:19PM (5/24/2009)
The Chrysler Dealers should have been the first ones to know that their cars are crap. Supporting them by taking up more stocks is just stupidity.
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Soccer Mom 3:50PM (5/24/2009)
The current Chrysler's bankruptcy is a prominent case of exceptional stupidity. The company doesn't want to die (or at least that's what they say), but wants to re-emerge as stronger and more competitive. To attain that, it:
1. Screwed up its investors (they'll surely flock to the "new" Chrysler to help financing operations)
2. Screwed up its suppliers by not paying for what was delivered already (oh, they will just line up in a queue to make parts on the credit to Chrysler, which Chrysler will, of course, pay off from the new investments - see the point 1)
3. Screwed up its distribution network (see the article)
4. Screwed up its customers, by playing with warranties, resale values and other aspects of the cars
After screwing up basically everyone, what are they hoping for? That everyone has short memory?
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Tony 9:35PM (5/24/2009)
You forgot screwing the American and Canadian taxpayer when both governments have to forgive the "loans", or have to "give" even more of your tax payers money to Chrysler and GM
If Chrysler does eventually lose the battle and liquidate, rest assured the now "Fiat" executives will be adequately compensated with your money.
Saxxon 4:13PM (5/24/2009)
Where is the 'corporate accountability" that Obama promised us?
After all, they are the ones in charge of this whole bankruptcy mess.
I guess if it doesn't affect his UAW votes for re-election, he doesn't really give a
s@#t, does he?
So much for all those jobs he was going to save.
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AirRaid 5:10PM (5/24/2009)
Right, cause he's Jesus. Like, do you know any other candidate that would have been able to fix this whole problem with the car business in 4-5 months? Didn't think so. Chrysler Financial is a sinking ship because of the bridges they burned with their investors and suppliers, so everyone is jumping ship. Don't expect Obama to come in and, make everything right, correcting years and years of bad business decisions.
dejal 8:10PM (5/24/2009)
The "One" owns this mess. D'bag Bush shouldn't have touched it, and the current buttclown couldn't let it go. The "One" will probably give each dealership a couple of million for their problems.
indymcsc 4:34PM (5/24/2009)
Bankruptcy is a b!tch aint it? These dealers are screwed and in the interest of getting Chrysler out of bk this week these dealers will be told to STFU.
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gurry 7:01PM (5/24/2009)
It's getting really nasty being envolved in this mess, whether your a shareholder, worker, consumer, supplier, government overseeing dude, the Judge, local and state governments, the Fed, the dealers, did I miss anyone? They will think about screwing someone else tomorrow!
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mitchw 6:34PM (5/24/2009)
If you have just witnessed how Chrysler treats its dealers, how do you think they will treat you the customer? Fair warning.
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