• Jun 4, 2009
General Motor is attempting to cushion the blow of dealers losing their franchises as part of the automaker's bid to pare down its network. According to Automotive News, the bankrupt automaker is offering some dealerships between $100,000 to $1 million to assist in the "wind down" of their businesses. In the case of Pontiac-specific dealers, GM is offering between $10,000 and $200,000.

The money is apparently intended to help dealers (whose franchises won't be renewed following their Oct. 31 expiration dates) sell off their remaining inventory. Interestingly, as part of accepting the funding, dealers must agree to stay open until January (yet they cannot order new product), and they must agree not to sue The General until after their franchise agreement expires.

Source: Automotive News | Image: Scott Olson/Getty]


I'm reporting this comment as:

Reported comments and users are reviewed by Autoblog staff 24 hours a day, seven days a week to determine whether they violate Community Guideline. Accounts are penalized for Community Guidelines violations and serious or repeated violations can lead to account termination.


    • 1 Second Ago
  • 12 Comments
      • 5 Years Ago
      Talk to your congressman/woman? but chances are we won't have much to do with how OUR money is being spent
      • 5 Years Ago
      @skicat

      It sounds like you're supporting Tim's ultimate point:

      1) "It costs a carmaker the same amount of money to have ONE showroom brochure created, (not PRINTED) $75-$100K, as it does half a million."

      Precisely. So the marginal cost of printing brochures and other promotional materials is nil; the only issue is really the cost of shipping which is not that big a deal.

      2) "The same $250-$400K per spot cost to have a dealer ad campaign produced that may be used by 10 dealers or 1000"

      Since it doesn't seem that Chrysler is completely pulling out of many markets, how does this cost increase on a per-dealer basis?

      What I'm not getting from "your side" is how you're rationalizing that there will be no effect on sales volume by closing dealerships. The assumption is that Chrysler will keep is current volume (or increase it), and that same volume will be split by fewer dealers. I would imagine that customers that patronize those multi-generation dealerships that Chrysler seems to be so fond of closing will NOT drive out of their way to those "new-fangled" Project Genesis dealerships. If Toyota, Hyundai or Kia pick up those family dealerships, Chrysler is going to lose customers for good.
        • 5 Years Ago
        "1) "It costs a carmaker the same amount of money to have ONE showroom brochure created, (not PRINTED) $75-$100K, as it does half a million."

        Multiply this by upwards of 50 brochures to cover an entire line of cars, SUVs, CUVs, trucks and commercial vehicles, not to mention auto show and promotional materials, and you are talking real money.

        "Precisely. So the marginal cost of printing brochures and other promotional materials is nil;"

        Not in the least. Jay is correct. Chrysler spends upwards of $10 million annually in PRINTING costs alone. That's over and above creative.

        "What I'm not getting from "your side" is how you're rationalizing that there will be no effect on sales volume by closing dealerships."

        If that appears to be my rationale, then I am not making myself clear. It's quite reasonable to project a loss of market share as a result of the bankruptcies. (In fact, a number of AB posters rant they'll never buy a "Gummint Motors" vehicle.) All the more reason for consolidating retail outlets. My reason for siding with the carmakers is that they do spend A LOT of money supporting dealers and MUST streamline every aspect of their operations to come out of this as viable entities. If Chrysler has done their dealers wrong by pressuring them into upgrading facilities and overstocking inventory, the bankruptcy court should figure out a way for them to at least recoup some of their losses.

        As mentioned in another AB post, Ford has been doing this for that last 3 years, and nobody is screaming about that. Perhaps because it has been done out of the white hot spotlight of these very public bankruptcies.

        Last but not least, dealers are entrepreneurs. They never complained when their risks payed off with years of profits and the money to send their kids to college. There are NO guarantees in life. (Ask me how many times I've been laid off and what I've had to do to get other jobs.) I am not unfeeling as to what people are going through. Sometimes, life ain't fair.

        • 5 Years Ago
        "1) "It costs a carmaker the same amount of money to have ONE showroom brochure created, (not PRINTED) $75-$100K, as it does half a million."

        Precisely. So the marginal cost of printing brochures and other promotional materials is nil; "

        Actually it's the other way around. The brochure creation costs are minimal compared to the printing costs. Those high quality paper, glossy, multi page, full color brochures aren't cheap no matter how many you print.
      • 5 Years Ago
      Thanks to all today for your comments. I will make mine short: if GM had devoted the same amount of money to developing plug-in electric vehicles (like Ford is doing with Smith Electric Vehicles of England) a number of years ago - as they did to developing this new Camaro (and the aborted Australian GTO) then they would have been a) a market leader, b) enjoyed more sales in No. America, c) been much more well off $$$$$, d) actually listening to repeat customers who hate foreign oil producers like Hugo Chavez. Why are we still waiting to see so-called hybrid GMC and Chevy pickups that are NOT going to be "plug-in hybrids"? This is insane! Yes, I am on the West Coast. Yes, I have owned GM vehicles going back to a 1947 Chevy Fleetline (and do not want to buy Japanese if I don't have to). No, I will not be buying the "new Camaro" as I need a small SUV or similar vehicle.
      • 5 Years Ago
      Since we the tax payers now own GM, how do I get to vote on how MY money is being spent by MY company.

        • 5 Years Ago
        When your share of the ownership grows to 5% or whatever the cutoff, you can get a seat on the board.
        • 5 Years Ago
        Yikes STFU,
        What you pay in taxes would not pay for the 3 damn airplanes obama used for his swinger party he went to last week.
        Also your few bucks would first got to repay the 2 trillion dollars the moron obama gave away to the banks including non American ones.

        As to good news the American Corvette becomes the first car getting some recognition in Washington

        Thanks to Rep. John Shimkus (R-Ill.) and 55 stalwart colleagues

        Corvette resolution (H.Res.970)

        In the House of Representatives, U. S., Whereas the 30th of June would be an appropriate day to designate as
        `National Corvette Day': Now, therefore, be it

        Resolved, That the United States House of Representatives supports the designation of a `National Corvette Day' to honor the Chevrolet Corvette."

        Whereas the Chevrolet Corvette is America's first sports car;

        Whereas the first production Corvette rolled off a Flint, Michigan, assembly line on June 30, 1953;

        Whereas the Corvette is now manufactured in Bowling Green, Kentucky;

        Whereas the Corvette is the most widely respected production sports car in United States history;

        Whereas the Corvette is truly a symbol of American pride.