Comments on: NOT SOCIALISM: GANGSTERISM

By: Evidence Emerges that Chrysler Dealer Closings Were Politically Motivated « Romanticpoet’s Weblog

Thu, 28 May 2009 10:55:48 +0000

[...] wrote a piece on my own blog a while back when Chrysler dealer George Joseph wrote a letter published on AT about his own [...]

By: John

John — Wed, 27 May 2009 21:14:47 +0000

I cannot figure out how stealing certain blue sky dealerships, a right to sell Chrysler products as new products, bought and paid for by individual dealers from Chrysler, is going to help Chrysler either sell more cars or manufacture cars cheaper or better. Dealerships do not cost Chrysler money. Dealerships buy cars from Chrysler for resale to the public. Dealers have no effect on the cost of design/construction of new cars or on Chrysler’s economic woes. These decisions could not have been decisions driven by economic ones to lower Chrysler’s production costs or to enable it to sell more cars. Something else other than good business choices drove this decision. Sounds more like a typical government decision to me. It will be interesting to learn more of the story as time rolls on. Bet it leads back to government.

By: bobwire

bobwire — Sun, 24 May 2009 08:31:46 +0000

Rick sez “How long are you going to try to convince everyone that Obama is just a moderate, nothing radical about him?”

Rick, Obama is not a non-moderate. You will eventually have to eat this, as you do not relish homelessness. Strawmen you can get behind.

By: Anon

Anon — Sat, 23 May 2009 19:45:19 +0000

There are plenty of actual criticisms to be made of Obama, but this one is just silly. It’s well known and understood that Chrysler and GM would like nothing more than to get rid of a lot of dealers, but have had trouble doing so due to many state laws that are very much anti-free-market.

By: c3

c3 — Fri, 22 May 2009 16:41:21 +0000

Many good points here from “both sides”. I don’t like the term “gangsterism”. For me, this comes back to a sentiment I had prior to the election; Barack Obama has “liberal sensibilites” (that’s not a pejorative term.). In this case of “deconstructing” a large automaker, I would assume that Obama would tend to focus on job loss/preservation versus small business impact. Not that he wouldn’t consider small business impact but it wouldn’t “resonate” as much.

As a related matter, it reminds me of so many recent news stories on “old industry” communities dying. Inevitably, someone from the local economic development task force/committee/office would emphasize that “we will succeed because we have so many highly-skilled workers”. In other words, the presence of these workers will, almost by definition, create new businesses. To further compound this they will generally cite the “buzz word” industries (i.e. “green technology”).

Businesses aren’t created because “they have to”. (And I suspect it will hard to “create a business” based on having to pay its workers something approximating $40+/hour.

By: John Howard

John Howard — Fri, 22 May 2009 13:05:00 +0000

In what universe is it radical to try and save the workers (including the workers at dealerships) from the staggering, decades-long incompetence of Chrysler management… which grew out of, and continues to grow out of, the staggering demands of workers and government on their economic viability?

By: UNRR

UNRR — Fri, 22 May 2009 11:43:24 +0000

This post has been linked for the HOT5 Daily 5/22/2009, at The Unreligious Right

By: Shaun Mullen

Shaun Mullen — Fri, 22 May 2009 11:37:59 +0000

Two points, one already made:

(1.) Chrysler worked hard to run a once proud company into the ground by offering a product line long on big SUVs and pimpmobile stylings while many foreign automakers passed it by. Yes, Obama is a Big Socialist Meanie, but none of this would be happening if Chrysler (and GM) hadn’t decided that making money was more important than making a competitive product. That was exactly backwards: You make money by offering a competitive product.

(2.) The dealer networks of Chrysler and GM have been a big part of the problem in that they took whatever crap that the companies sent them with nary a murmur of dissent. Maybe — just maybe — things would have turned out differently if the guys who had to ask their sales manager if they could throw in the undercoating for free (wink, wink) had pressed Chrysler and GM to diversify.

On second thought, fuggedabout it. You’re right, Rick. It’s all Obama’s fault.

By: Surabaya Stew

Surabaya Stew — Fri, 22 May 2009 06:25:00 +0000

It has been my understanding that Chrysler and GM have been itching to free themselves from many of their dealers for many years now, and the major reason they have not done so until now has been the incredibly high cost of closing a dealership. If we take this Dodge dealer as a typical example, the $3 million in inventory is only a small fraction of the total cost in paying back all the expenses associated with a franchise of this nature. All the loans, business improvement expenses, real estate, lost income, retraining, taxes, etc., would probably bring up the average cost of fairly compensating all parties for closing down a typical dealership to over double the inventory value!
When you add in the 1,100+ GM franchises (plus an unknown amount of Ford dealers to be closed in the future), we could be talking well over 10 billion dollars here. This is in part due to the restrictive state laws that dealers have pushed to protect these dealers, but probably the larger issue is the self-defeating nature of the franchise business business model in a declining market for American cars.

Of course it is impossible not to feel bad for the employees and owners of the nearly 2000 american auto dealerships to be shut down, but isn’t that part of the risk associated with running and working in any business? It certainly does seem unfair that some people are getting bailed out while others suffer, but is some sort of extraordinary government compensation really justified in this case? Haven’t we suffered enough government intervention yet? Don’t we want capitalism to do its job again?

By: tjbbpgobIII

tjbbpgobIII — Fri, 22 May 2009 04:58:04 +0000

I suppose when all is said and done, with Chrysler and General (Government) Motors, that I will just walk down to the nearest GM dealer and drive away in my new GM pickup truck, since it’s already paid for.