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Eric Johnson
05-28-2009, 11:40 AM
http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/Furor-grows-over-partisan-car-dealer-closings-46261447.html

http://tinyurl.com/qzaxm8

Furor grows over partisan car dealer closings
By: Mark Tapscott
Editorial Page Editor
05/27/09 3:37 PM EDT
Evidence appears to be mounting that the Obama administration has systematically targeted for closing Chrysler dealers who contributed to Repubicans. What started earlier this week as mainly a rumbling on the Right side of the Blogosphere has gathered some steam today with revelations that among the dealers being shut down are a GOP congressman and closing of competitors to a dealership chain partly owned by former Clinton White House chief of staff Mack McLarty.

The basic issue raised here is this: How do we account for the fact millions of dollars were contributed to GOP candidates by Chrysler who are being closed by the government, but only one has been found so far that is being closed that contributed to the Obama campaign in 2008?

-more-

badbullgator
05-28-2009, 12:14 PM
http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/Furor-grows-over-partisan-car-dealer-closings-46261447.html

http://tinyurl.com/qzaxm8

Furor grows over partisan car dealer closings
By: Mark Tapscott
Editorial Page Editor
05/27/09 3:37 PM EDT
Evidence appears to be mounting that the Obama administration has systematically targeted for closing Chrysler dealers who contributed to Repubicans. What started earlier this week as mainly a rumbling on the Right side of the Blogosphere has gathered some steam today with revelations that among the dealers being shut down are a GOP congressman and closing of competitors to a dealership chain partly owned by former Clinton White House chief of staff Mack McLarty.

The basic issue raised here is this: How do we account for the fact millions of dollars were contributed to GOP candidates by Chrysler who are being closed by the government, but only one has been found so far that is being closed that contributed to the Obama campaign in 2008?

-more-

Interesting. One of our local dealers is being closed and they are fighting it. I also know that they are active in the GOP locally…..hummmmm. They have been profitable of the past 25 years and are one of the areas largest volume dealerships. They are also ranked very high in customer service always and sell both Chrysler and Jeep. The supposed criteria for closing includes profitability, location, customer satisfaction, and multiple brands. Seems they meet all the criteria for remaining a dealer unless……there is something to what you have posted…..

Tinfoil hat regards

BonMallari
05-28-2009, 01:46 PM
Its all part of their master plan, eliminate the competition for upcoming elections, give undocumented aliens the vote, load up liberal SCOTUS jurists and change the face of politics and the nation for yrs to come...and the sad thing is that have willing participants in the liberal leaning media and uneducated sheeple that will vote for candidates because of snappy ads and public opinion polls...then a decade or so from now everyone will ask how in the heck did our country get to this sad state of affairs..they have the votes and the leverage to ramrod changes, we have lost the check and balance sysytem for now

Roger Perry
05-28-2009, 01:55 PM
Its all part of their master plan, eliminate the competition for upcoming elections, give undocumented aliens the vote, load up liberal SCOTUS jurists and change the face of politics and the nation for yrs to come...and the sad thing is that have willing participants in the liberal leaning media and uneducated sheeple that will vote for candidates because of snappy ads and public opinion polls...then a decade or so from now everyone will ask how in the heck did our country get to this sad state of affairs..they have the votes and the leverage to ramrod changes, we have lost the check and balance sysytem for now

Are you forgetting that for the first 6 years that Bush was in office the Republicans controlled both the House and Senate? Think there was some ramrodding going on then? Mabe that is why the state of our economy is in the shape it is today!

Hew
05-28-2009, 02:25 PM
Are you forgetting that for the first 6 years that Bush was in office the Republicans controlled both the House and Senate? Think there was some ramrodding going on then? Mabe that is why the state of our economy is in the shape it is today!

http://www.youtube.com/watch?v=j5GiNlVbzFQ&feature=related

Franco
05-28-2009, 04:20 PM
then a decade or so from now everyone will ask how in the heck did our country get to this sad state of affairs..




At the rate this current administration is going, it won't take 10 years for us to be a 3rd world nation.

When productive hard-working Americans can't put food on thier table because of our socialist state, when those that have been putting money into SS for 40 years can't get any retriement money from SS, when the tide of Islamic and Hispanic immigration swells to 50 million, when our history is rewritten, then we will see violence like we have never witnessed on our streets.

Our current administration has us on the fast track to doom!

zeus3925
05-28-2009, 06:45 PM
Fear runs rampant here! Happy Halloween!

subroc
05-28-2009, 06:56 PM
outrage.

Bush fired a couple of US Attorneys who weren't doing the job and they happened to be democrats and the national media went nuts. There were investigations.

How should this issue be handled?

We need an independent council!!!!

what did you know and when did you know it?????

JDogger
05-28-2009, 10:57 PM
http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/Furor-grows-over-partisan-car-dealer-closings-46261447.html

http://tinyurl.com/qzaxm8

Furor grows over partisan car dealer closings
By: Mark Tapscott
Editorial Page Editor
05/27/09 3:37 PM EDT
Evidence appears to be mounting that the Obama administration has systematically targeted for closing Chrysler dealers who contributed to Repubicans. What started earlier this week as mainly a rumbling on the Right side of the Blogosphere has gathered some steam today with revelations that among the dealers being shut down are a GOP congressman and closing of competitors to a dealership chain partly owned by former Clinton White House chief of staff Mack McLarty.

The basic issue raised here is this: How do we account for the fact millions of dollars were contributed to GOP candidates by Chrysler who are being closed by the government, but only one has been found so far that is being closed that contributed to the Obama campaign in 2008?

-more-

Suppose now, Just suppose, that in recent times, 9 out of 10 indepedent
Chrysler dealers contributed to the GOP. Then with the closing of some 25%, across the board, wouldn't that lean more heavily towards closing those that contributed to the right vs. those that contributed to the left?
There is no conspiracy other than what your fearless leader, 'Rush' plants in your fearful brains.
Sqwack...shiver...they're out to get us...!

JDogger
05-28-2009, 10:58 PM
http://www.youtube.com/watch?v=j5GiNlVbzFQ&feature=related

That's the best you have to offer up? You're slipping.

Gerry Clinchy
05-29-2009, 08:37 AM
The article raises the question of what the criteria are for closing a dealership. If those criteria were known, then an informed assessment could be made on this debate.

The article also mentions another pertinent fact. Toyota, for example, limits the number of its dealerships in a given geographic area. This does increase the # of vehicles sold per dealership; and, thus, the profit per dealership. They also attempt to make their dealerships operate as "state of the art". Their service departments are quite good. My Toyota is 6 years old, and I still go to the dealer for service. Service is a big money-maker for the dealers as well.

I think the dealer closings criteria are important to know. If they are strictly performance-driven, then it could be that the partisan leanings of the owners are not the key factor. Some transparency would help.

Since BHO promised creation of 350,000 jobs ... he'll have to add an additional 100,000 (the jobs lost in the auto industry) to keep that promise.

It is also pertinent to mention that dealers saw the handwriting on the wall long before the rest of the population. Many of the GM and Chrysler dealers also incorporated foreign brands to their business. That has been going on for many years.

Buzz
05-29-2009, 09:06 AM
What a joke.

I saw a piece on this story last night on the TV. It turns out that the total number of Chrysler Dealers who had given money to Democrats was ZERO!

Kinda hard not to close Republican supporting dealers...

Franco
05-29-2009, 09:33 AM
I personally know an African-American female that lost her Chrysler/Dodge/Jeep dealership in the downsizing, so I don't beleive in this being a conspiracy.

She bought the dealership over a year ago, increased sales volume by over 20% and they still pulled the plug. I believe she is going to fight the decision by Chrysler.

Lucky for her she still owns a Ford, Mazda and GM Truck dealerships. She is not a part of the GM downsizing.

Eric Johnson
05-29-2009, 11:24 AM
Buzz-

Did the piece you saw mention the RLJ-McCarty-Landers chain of dealerships? McCarty is the former Clinton aide. Surely you don't believe that no contributions were made to the Dems.

The real point here is that the firms should have been told to file bankruptcy. When they asked for the first hand-out they should have been told, "No". Steve Rattner has no experience in the auto biz nor in bankruptcy. How on earth does the government think they're going to run a biz in an industry in which they have no experience and that is bankrupt. I'd guess in 2-3 years that GM will be like the NYC and Pennsylvania RR....mere memories.

Eric

Hew
05-29-2009, 04:02 PM
Buzz-

Did the piece you saw mention the RLJ-McCarty-Landers chain of dealerships? McCarty is the former Clinton aide. Surely you don't believe that no contributions were made to the Dems.
Great minds think alike. Anybody who has read anything about this story has seen former Clinton Chief of Staff Mac McLarty's name mentioned. Any dummy like me with an ounce of independent thought, access to a computer and google can find in about 17 seconds that Mac has given money to the Dems:
http://www.campaignmoney.com/political/contributions/thomas-mclarty-iii.asp?cycle=08

Where are you getting your, ahem..."news," Buzz? DNC TV?

Blackstone
05-31-2009, 03:50 PM
The fact is, most dealership owners, regardless of manufacturer, are Republicans. Therefore, if dealerships are being closed, most of them are going to be owned by Republicans.

The government is not telling Chrysler or GM which dealerships to close. It wouldn’t much sense for the government to force Chrysler to close dealerships that are profitable and selling a lot of cars for the Chrysler, just because they are Republican. Chrysler would lose money, be less viable, and probably end up going out of business. It’s just not logical.

Manufacturers are making the decision on which dealerships to close based on several factors. Many of these dealerships are poor performers, or are in areas or markets the manufacturer feels they do not need representation. The fact is, U.S. auto manufacturers have lost significant market share, and are selling fewer vehicles than they used to. Therefore, they need fewer dealerships to sell them. There has been an effort underway since about 2000 by all manufacturers to reduce the number of dealerships they have. Since 2006, Ford has closed about 150 dealerships. GM has closed about 200. I am not sure how many Chrysler has closed. Manufacturers used various methods to facilitate these closings. They bought some dealerships out, and closed the location. They helped some dealers negotiate the sale of their franchise to other dealers in the same market, thus consolidating locations. With some poor performers, the manufacturers simply took a hands off approach, and allowed the dealership to fail and go out of business on its own. Chrysler’s bankruptcy and GM’s impending bankruptcy has just accelerated the process of reducing the number of dealerships. The government has told both manufacturers they must provide an acceptable viability plan if they are to receive any more loans. This gave the manufacturer an excuse to take the gloves off. No more Mr. Nice Guy! They can now close every dealership they want to go away without worrying about franchise agreements or, in most cases, state statutes.

One local Chevrolet dealer in my area received a letter from GM advising they were planning to close it. He is screaming bloody murder in news interview, saying he is being targeted unfairly. This same guy also happens to own a state of the art Toyota store. I see several ads every day on TV for his Toyota store, but I have never seen an ad for his Chevrolet store. I wouldn’t even have known he had a Chevy store if I didn’t work in the business. For several years, GM has been on this guy to upgrade his facility, improve sales, and improve customer satisfaction for sales and service. He has done none of those things. He was arrogant when he thought GM couldn’t do anything to him. Now, he wants to complain.

Unfortunately, some good dealers that don’t deserve it are going to be caught in this as well. Some of them are in the wrong location, or in the case of Pontiac & Saturn dealers, they are going to lose franchises they need to remain profitable. Them, I feel sorry for.

Hew
05-31-2009, 06:48 PM
The government is not telling Chrysler or GM which dealerships to close. It wouldn’t much sense for the government to force Chrysler to close dealerships that are profitable and selling a lot of cars for the Chrysler, just because they are Republican. Chrysler would lose money, be less viable, and probably end up going out of business. It’s just not logical.

For starters, after tomorrow GM IS the govt.

You may be correct that the govt. isn't telling Chrysler which dealerships to close. I think the facts are still being fleshed out. But your reasoning for coming to that conclusion doesn't seem too sound. Since when has the govt. or politics or politicians with vendetas been about common sense or logic?

Blackstone
05-31-2009, 08:20 PM
Hew,

The Gov. will own a significant piece of GM after tomorrow. However, the plan, as it’s being presented, is for the Gov to divest itself of those holding as quickly as possible. The timeline has not been announced, but it is in the viability plan. GM will have the same leadership in place running the “New Company”, so I don’t expect much to change. The Gov. will not be running the company, as some have suggested. However, I am sure they will exert pressure on the company to take certain measures they feel are necessary in order to return the company to profitability. It remains to be seen how much pressure they will apply, and what they will deem as necessary action for the company to undertake. Only time will tell.

I used to work in dealer development and network planning for one of the manufacturers. Based on demographics and other factors, they developed a network plan for where it needed dealerships, and what lines should be in those dealerships. They originally implemented the plan without much regard to the owner operator that ran the store. So, in an effort to get the location they wanted, sometimes a marginal dealer ended up with the dealership. The manufacturer was of the opinion they could always rectify that later. However, they soon found out that once you get a poor operator in a store, it is almost impossible to remove them unless the owner decides to sell or terminate on their own.

My point is, if these new companies, GM & Chrysler, are going to survive, they will need to have good dealers in the right locations. They cannot afford to get rid of good dealers just because they are Republicans and retain poor ones because they are Democrats. With many fewer dealerships to sell product, the manufacturers are going to need every dealer to be as strong as possible if they are to have a chance at becoming profitable again.

Hew
05-31-2009, 09:44 PM
The Gov. will own a significant piece of GM after tomorrow. However, the plan, as it’s being presented, is for the Gov to divest itself of those holding as quickly as possible. The timeline has not been announced, but it is in the viability plan. Yes, I know that's the plan, but who are they going to divest it to? Nobody wants it now, so who's going to want it after the govt. runs it even further into the ground? GM will have the same leadership in place running the “New Company”, so I don’t expect much to change. The Gov. will not be running the company, as some have suggested. However, I am sure they will exert pressure on the company to take certain measures they feel are necessary in order to return the company to profitability. It remains to be seen how much pressure they will apply, and what they will deem as necessary action for the company to undertake. Only time will tell. According to this article in Business Week it didn't take the govt. long to exert considerable pressure...and that's BEFORE they owned SEVENTY PERCENT (70%)...in his hey day of meddling George Steinbrenner didn't own 70% of the Yankees: http://www.businessweek.com/magazine/content/09_19/b4130024103079.htm

I used to work in dealer development and network planning for one of the manufacturers. Based on demographics and other factors, they developed a network plan for where it needed dealerships, and what lines should be in those dealerships. They originally implemented the plan without much regard to the owner operator that ran the store. So, in an effort to get the location they wanted, sometimes a marginal dealer ended up with the dealership. The manufacturer was of the opinion they could always rectify that later. However, they soon found out that once you get a poor operator in a store, it is almost impossible to remove them unless the owner decides to sell or terminate on their own. Sure, GM was at times a bumbling, beauracratic mess of stupidity. You think the new owner (US govt.) runs its enterprises more efficiently?

My point is, if these new companies, GM & Chrysler, are going to survive, they will need to have good dealers in the right locations. They cannot afford to get rid of good dealers just because they are Republicans and retain poor ones because they are Democrats. With many fewer dealerships to sell product, the manufacturers are going to need every dealer to be as strong as possible if they are to have a chance at becoming profitable again. I totally get your point and it makes fine and perfect sense in a corporate world. Your point, when applied to government, and worse, to politics, is totally inapplicable as the govt. and politicians couldn't care less about turning profits. If they did, our debt. wouldn't be xxx trillion, would it?

----------------------------------------------

Hew
06-02-2009, 06:04 AM
Snippets from an article in today's New York Times:



The 31-Year-Old in Charge of Dismantling G.M.

By DAVID E. SANGER (http://topics.nytimes.com/top/reference/timestopics/people/s/david_e_sanger/index.html?inline=nyt-per)
Published: May 31, 2009
WASHINGTON — It is not every 31-year-old who, in a first government job, finds himself dismantling General Motors (http://topics.nytimes.com/top/news/business/companies/general_motors_corporation/index.html?inline=nyt-org) and rewriting the rules of American capitalism.

But that, in short, is the job description for Brian Deese, a not-quite graduate of Yale Law School who had never set foot in an automotive assembly plant until he took on his nearly unseen role in remaking the American automotive industry.

Nor, for that matter, had he given much thought to what ailed an industry that had been in decline ever since he was born. A bit laconic and looking every bit the just-out-of-graduate-school student adjusting to life in the West Wing — “he’s got this beard that appears and disappears,” says Steven Rattner (http://topics.nytimes.com/top/reference/timestopics/people/r/steven_rattner/index.html?inline=nyt-per), one of the leaders of President Obama (http://topics.nytimes.com/top/reference/timestopics/people/o/barack_obama/index.html?inline=nyt-per)’s automotive task force — Mr. Deese was thrown into the auto industry’s maelstrom as soon the election-night parties ended.

“There was a time between Nov. 4 and mid-February when I was the only full-time member of the auto task force,” Mr. Deese, a special assistant to the president for economic policy, acknowledged recently as he hurried between his desk at the White House and the Treasury (http://topics.nytimes.com/top/reference/timestopics/organizations/t/treasury_department/index.html?inline=nyt-org) building next door. “It was a little scary.”

.........

Mr. Deese’s role is unusual for someone who is neither a formally trained economist nor a business school graduate, and who never spent much time flipping through the endless studies about the future of the American and Japanese auto industries.

http://www.nytimes.com/2009/06/01/business/01deese.html?ref=politics (http://www.nytimes.com/2009/06/01/business/01deese.html?ref=politics)


Whew. I know I feel so much better knowing that a 31 year old is behind the GM takeover. What with his vast experience in the auto industry (none), experience in the private sector (none) and infinite life experience at 31 years of age and all. Sweet.

And I was particularly comforted by the notion that from the day Obama was elected until mid-February there was only ONE person in the Obama admin working full-time for the auto task force and it was this kid. That's a niiiiiiiiice.

dback
06-02-2009, 08:48 AM
Snippets from an article in today's New York Times:



Whew. I know I feel so much better knowing that a 31 year old is behind the GM takeover. What with his vast experience in the auto industry (none), experience in the private sector (none) and infinite life experience at 31 years of age and all. Sweet.

And I was particularly comforted by the notion that from the day Obama was elected until mid-February there was only ONE person in the Obama admin working full-time for the auto task force and it was this kid. That's a niiiiiiiiice.

Yeah.....but HEW.....he's a 'BO Groupie'.....everything will be great. We'll all just sit around the 'Solar' camp fire and sing praises to our new messiah!!!!

Henry V
06-02-2009, 03:29 PM
From a recent post on fivethirtyeight.com. Never let the real facts get in the way of what you want to believe. :)

5.31.2009
On Moon Landings, Michelle Malkin, P-Values, the Clintons, and the Magical Mystery Dealergate Conspiracy Theory
by Nate Silver @ 5:47 PM
Bookmark and Share Share This Content

On Wednesday, we ran an item about the hypothesis, put forward by certain conservative blogs, that the Obama administration was systematically more likely to close Chrysler dealerships whose owners are significant contributers to Republican political candidates. As we noted, it's absolutely true that the owners of the closed dealerships donated disproportionately to Republicans. However, as one could have learned through a few minutes of searching through FEC disclosure records, this characteristic was not unique to the owners of the closed car dealerships. Rather, auto dealers in general, whether or not their dealerships had been closed, donate disproportionately to Republican candidates -- as one might reasonably expect from a group of (mostly) wealthy, older men in suburban areas.

This morning, Marla Singer at the blog Zero Hedge provided a more sophisticated take on the subject. Instead of comparing the list of closed dealerships to the entire universe of car dealers, Singer instead went through the trouble of looking up campaign finance data for the Chrysler dealers who had been allowed to remain open, as well as those who had their businesses closed. She then ran a series of regression analyses based on this data, which produced the following results:

http://1.bp.blogspot.com/_07Vo5mDNg18/SiJTZ9rN7CI/AAAAAAAAACQ/mpt1YDv8IOc/s400/crydata98.jpg

The key thing to look at is this table are the P-values, which are the probabilities of the outcome s occurring due to chance alone. When social scientists look at P-values in order to test the validity of a hypothesis, they are generally looking for a figure of .05 or lower, meaning there is no more than a 1 in 20 chance that an outcome could have occurred due to pure randomness. That is, they want there to be at least a 95 percent chance of the hypothesis being true.

There is a lot of debate in academic circles, which I mostly won't bore you with now, about whether the choice of 95 percent is the "right" number for tests of statistical significance. The choice of a statistical significance threshold may depend on the particular application as well as things like Bayesian priors. It's important to emphasize that no statistical analysis exists in a vacuum. There are times -- such as when I'm building a predictive model rather than trying to evaluate the "truth" behind a particular hypothesis -- when I'll include a variable even if its statistical significance is less than 95 percent. There are other times, such as when a hypothesis lacks a clear explanatory mechanism, and/or conflicts with other evidence, when I'll treat even a 95 percent positive finding quite skeptically, and would want a statistical significance threshold of 99 percent or even higher. But for better or for worse, the 95 percent threshold represents the default; if someone claims that something is "statistically significant", you can assume that they are referring to the 95 percent threshold unless they state otherwise. And if they claim that something is "highly" statistically significant, they are usually referring to a 99 percent likelihood of a positive finding or greater.

As you can see from Singer's data set, while there are some intriguing relationships in the data, none of them are particuarly close to statistically significant using the 95 percent test. The nearest "hit" is that for Hillary Clinton donors, who -- Singer found -- were slightly more likely to have their dealerships remain open. However, the associated p-value of .125 for the Clinton dealers does not imply statistical significance at the 95 percent or even the 90 percent level.

In spite of this, Singer reports that "there [is] a significant and highly positive correlation between dealer survival and Clinton donors". Although she hedges her conclusion a bit later on, this is a fairly irresponsible sentence to have written. Most people, in looking at this same exact set of data, would not only have avoided the implication that it proves the dealergate hypothesis, but would probably have come to something of the opposite conclusion: it argues strongly against the dealergate hypothesis. After all, there is no positive relationship whatsoever in the data on Democratic, Republican, Obama or McCain donations -- which until Singer's analysis was posted approximately 10 hours ago -- had been the focus of the dealergate hypothesis. In fact, in several cases -- such as for the data on Republican donations -- the coefficient has the opposite sign of the one that the purveyors of the dealergate hypothesis were hoping for. Republican donors were incrementally less, rather than more likely likely to have their dealerships shuttered, according to Singer's analysis, although the pattern is nowhere in the ballpark of being "statistically significant" as most of us would define it.

Predictably, this has not prevented people like Michelle Malkin and Doug Ross from claiming that Singer's data confirms their hypothesis. Of course, it does not confirm their original hypothesis, which was that donors to Republican candidates were more likely to have their dealership closed. Instead, a new hypothesis has evolved -- it's all about those dirty, rotten Clintons! -- the sole reed of evidence for which is Singer's overstated conclusion (but not really her underlying data itself).

Whenever you see a Magically Mystery Hypothesis like this one -- one which constantly transforms itself to fit the (lack of) available evidence -- you should be skpetical. Suppose I wanted to prove that some people are skilled at a game of chance like roulette. At the Bellagio in Las Vegas on a busy Friday evening, there are -- I don't know -- probably something like 300 people playing roulette at any given time. If I tracked their performance over the course of the evening, I would find that some of them were doing improbably well -- there would be "evidence" that about 15 of them were in fact "skilled" roulette players at a 95 percent degree of confidence. I'd also find that about 15 of them were "coolers" -- that they were doing worse than one might expect through chance alone.

Would I claim that these results are evidence that roulette is in fact a game of skill? I would certainly hope not. Instead, I'd find that the same people who were "skilled" at roulette one night were, as a group, doing no better than the average player the next night (unless they were cheating).

The way this data is being used is almost the same. Singer ran six sets of regression analysis: one each for Obama, McCain, Clinton, Democratic and Republican donors, and another for those dealers who had made no political contributions at all. She was therefore testing six hypotheses. If these hypothesis were independent from one another (which, to be clear, in this case they aren't), the odds that at least one of the six would return a p-value of .125 or lower are better than 50:50! Not only are false positives possible -- they are practically inevitable, particularly if you test enough hypotheses and tolerate a low enough threshold for statistical significance.

Why, after all, stop at Clinton donors, who until this morning had never been central to the dealergate hypothesis? Why not look at John Edwards donors, or Ron Paul donors, or donations to any of various political action committees, or donations to members of the Senate Banking Committee, or donations to Congressmen who voted for the auto bailout plan? If you looked at enough of these, you would eventually come up with a few positive results -- and then you could work backward to formulate your own conspiracy theory around it. There is a name for this sort of practice: data dredging.

At the end of the day, people are going to believe what they want to believe: some people believe that the moon landing was faked, that 9/11 was a grand conspiracy, and that Barack Obama was born in Indonesia. There is no evidence for any of these claims, but that doesn't stop tens of millions of people from believing them! Dealergate, particularly in its original formulation (that Obama was punishing Republican donors with the Chrysler closings), is in largely the same category.

YardleyLabs
06-02-2009, 03:48 PM
Interestingly, the Washington Examiner link given at the beginning of this thread has been updated repeatedly and now says that there is no evidence of any bias against Republican donors in the dealerships identified for closure. Instead, it questions the entire need for dealership closings at all, suggesting that they are being forced on Chrysler by the administration despite Chrysler's belief that such closings are not needed. The article then suggests that dealerships are being targeted because dealership owners are a primarily Republican constituency and that any action that affects one party differentially from another must be considered partisan. What a pile of manure!

Lady Duck Hunter
06-02-2009, 04:13 PM
This is a letter from a Texas Dealership:

May 16, 2009

Dear America,

Recently, Chrysler, LLC notified Rogers Dodge, Inc., in Alvin, Texas of their anticipated closing of our dealership. Chrysler has pled their story quite publicly for several months in support of their request of billions of taxpayer dollars. This is our story.

We occupy a 3-year old Dodge-designed building for which we paid cash when it was built. It was appraised at $3,700,000 in 2007. We qualified as a Five Star dealer for the 2009 calendar year. We have remained profitable through all of this downturn. We have in excess of $1,000,000 in working capital in our dealership. We are selling at or above market share. We pay $75,000 per year in local property taxes and collect millions of dollars annually in state sales taxes. We employ 38 Alvin, Texas residents who all pay property tax, sales tax and income tax.

The owner, Mr. Peter Mankins, my uncle, owns 6 other dealerships, and has no liens on any of his properties or franchises. He has maintained a car dealership in Texarkana, Texas since the late 1960s. He purchased that dealership from my grandfather, who purchased it from my great-grandfather, who rode shotgun next to his father when he was 9, as they were settling the Oklahoma Territory. My great-grandfather started in the automotive business in the early 1900s as a motorcycle repairman, which eventually segued into an International Harvester franchise, and, subsequently, a Pontiac franchise. I have a large family, almost all of which are connected with auto dealerships in one way or another. I state all of this so that there is no confusion by Chrysler or the bankruptcy court or the US government over whether we are a group of half-committed dealers - we are not short-term auto dealers/we are committed over several generations. Chrysler and its dealers have been portrayed in the media as regressive small-town morons. Speaking solely for the dealers, I assure you this is not the case.

In the past year, we have embarked on several creative initiatives in order to remain profitable and out of bankruptcy court. We have become a very competitive used vehicle internet dealer by patterning ourselves after the most successful used vehicle internet dealers in the country. Selling more used vehicles than new vehicles is one of the stated criteria upon which Chrysler based their decision to close us. Would Chrysler have preferred their dealers join them in bankruptcy court? It was never our desire to allow ourselves to be a burden on the American taxpayers; nor do we plan this in the future. Selling more used vehicles has enabled us to not only avoid layoffs, but to actually grow our employee population from 25 to 38 during the period of May 2008 to May 2009, a 52 percent increase. Further, in the first four months of 2009, our new vehicle sales have increased by approximately 50% by employing the same innovative practices within our new vehicle department. Though Dodge district sales are down by about 50%, our new vehicle sales actually increased comparing April 2008 and April 2009. In our parts department, we have created one of very few eBay parts stores selling new factory parts. We have listed in excess of 4,000 Dodge, Chrysler, Jeep factory parts and are by far the largest internet seller of OEM DCJ parts in the world. This has increased our monthly parts sales by approximately 35% in a short 5 month period. In our service department, we have recently added an additional service advisor, a service manager, and three additional master technicians, have endeavored to maintain the least expensive oil change in town and, effective this month, extended our service hours to 14 hours per weekday and 10 hours on Saturdays. We were on track to move to 24-hour/7-day a week service hours by the end of 2009. Just this month, we hired a graduating University of Houston student as a photographer and videographer. We began the process of taking studio-quality photographs of our inventory, something which no other auto retailer in the country is doing. Evidence of our early progress with this can be found in a slideshow on our homepage at http://www.rogersdodge.com/.

When Chrysler needed dealers to purchase inventory so that the factories could keep operating and their employees could retain their paychecks, we complied and ordered 10 months of inventory. Our interest on inventory swelled from $15,000 monthly to beyond $50,000 monthly. Effectively, we took pay cuts in order to support Chrysler's cause. When Mr. Landry uttered his veiled threat that Chrysler would "remember those who supported us and those who didn't," we felt that we had done our part to support Chrysler and its workers. Now, we realize that we were just supporting our own demise. Last week, we were given three weeks to dispose of five months of inventory. In doing so, we anticipate losing in excess of $1 million - we may actually have to inject capital into our business in order to go out of business. Our $2 million plus in equity in our franchise is now completely worthless. Further, we now face the very real possibility that our new building will sit empty for months or years until someone is willing to purchase it.

Despite all of this, Chrysler is taking our franchise so that it can be given to our neighbor across the street, Ron Carter Autoland. Ron Carter Autoland has the local Ford, Chevrolet, Chrysler, Jeep, Pontiac, Buick and GMC franchises. They occupy a 40 to 50 year old building that does not comply with any manufacturer's design standards. They have recently moved their Ford, Chrysler and Jeep franchises into the same building, a violation of their franchise agreements with both Ford and Chrysler. They have recently cut their service hours, consolidated their used vehicle operations and laid off many employees. The manager, and a major shareholder, of Ron Carter Autoland is Mr. Cary Wilson, President-elect of the Houston Auto Dealers Association - apparently Mr. Wilson's political affiliation is very important to Chrysler, the bankruptcy court and the US government.

How exactly does transferring our franchise to our neighbor serve Chrysler's stated purpose of thinning out dealer numbers? The franchise will still exist - it will just have a new owner.

Though I am a Washington, DC-educated attorney and former employee of the US Department of Labor and the US Senate and an active advocate of the American way of life, it is difficult for me to view this abrogation of our franchise rights as anything more than a manipulation of US bankruptcy court and law so that Chrysler LLC can transfer wealth between dealers they like and those they dislike, those that have agreed to under-table favors and those that haven't, and to settle old vendettas. This is not the purpose of US bankruptcy protection and, surely, it isn't why the US Treasury has given billions to Chrysler to keep them in business.

This is our story; however, it is, unfortunately, not unique. Allowing this manipulation of US bankruptcy law will set a precedent that effectively invalidates all state franchise laws. Though technically a question of law, many of these closings are politically motivated. Thus, anyone with any interest in retaining the US economic system in its current form must contact their political representatives immediately. Small businesses will have no legal protections if these closings are allowed to occur. Rome is burning, America - please wake up.

Nicholas Parks, President
Rogers Dodge, Inc.
Alvin, Texas
RogersDodge.com
nhparks@gmail.com

*

May 20, 2009

A Sliver of an update:

First, thank you to the hundreds of citizens, customers, and competitors who have wished us well with our objection to Chrysler's Motion. It's great to know that there are so many people who understand the fundamental problems with the actions of Chrysler and the Bankruptcy Court - namely, the deprivation of Due Process and erosion of Federalism present in this case.

Since being notified on Thursday that we were on the list, three of our lenders have cut us off - representing 60% of our sales business over the last 2 months. One, San Antonio Credit Union, a collective of Texas credit unions, represented 44% alone and was the beneficiary of a great, long-term relationship with this dealership. Though I understand their fears and I believe they're justifiable, they seem not to realize that, at least for a while, we are still a franchise dealer. Further, the majority of our vendors with which we maintain business relationships have revoked our credit lines, resulting in the requirement that we must purchase all goods and services in cash. This doesn't effect us much - it's just a bit of a slight. After years of perfect performance with all of our vendors, it's a little depressing - but I suppose their fears are justifiable as well.

Meanwhile, Chrysler Financial, with which we currently maintain a $4 million floorplan balance (money lent to purchase vehicle inventory) has begun the practice of checking our inventory every other day. Perhaps someone sent my letter to Detroit? I surely didn't. I hope I never encounter another Chrysler employee. Regardless, Chrysler is either using Chrysler Financial to harrass us or they also fear that we will default on our obligations. We've been a partner with Chrysler Financial for 7 years - the total time that we've owned this franchise - and have never been out of trust one time. Further, if we were to default with Chrysler Financial, it would jeopardize all of our other franchises - which is not going to happen, regardless of the cost.

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Doesn't seem fair, does it?

YardleyLabs
06-02-2009, 05:36 PM
Unfortunately there is nothing fair in a bankruptcy. It is a process by which courts supervise selective management decisions to abrogate contractual relationships and to renege on credit agreements in an attempt to preserve some form of on-going business. Generally, the primary beneficiaries are the managers who created the bankruptcy to begin with and the secured creditors who in some cases may have also have had a hand in the management decisions leading to bankruptcy. In the interests of preserving the business, the courts provide wide latitude to the in-place management as long as it does not go further into debt.

I personally lost about $150,000 as a result of bankruptcies of three clients. In the case of the largest, the primary secured creditor was the company that had founded the bankrupt entity. It spun off the company as a separate subsidiary with an agreement under which it provided the company access to marketing data in exchange for a $12 million secured note. No cash was actually invested, but that note was the basis for giving the company control of the creditors committee and ultimately ownership of the post-bankruptcy entity. In the final settlement it received 60% of the on-going entity, the management received 30% to ensure retention, and another secured creditor received 10% in exchange for its original investment that came in the form of a secured loan of $600,000. I was one of a number of vendors who had involuntarily funded the creation of the software, at a cost of $10 million, that was the foundation for the surviving company. None of us was ever paid for our development work but the bankrupt company retained all rights to the software (which was designed by my staff) and used it to launch their business following bankruptcy. I never received a single dime of the money I was owed. From the perspective of the courts, unsecured creditors rank only slightly ahead of shareholders, on par with vendors, and slightly behind unpaid employees.

I do not know anything about the automobile business. However, many months ago the excessive number of Chrysler and General Motors dealerships was considered to be one of the major sources of inefficiency that would need to be addressed to turn around the industry. Another were the salary and benefit structures for union employees. No matter what happens, salaries have gone down, benefits have been reduced, retirees will suffer, and a substantial number of jobs will disappear forever. For dealers, the issue is not whether or not the dealerships are profitable, but whether the distribution network would be more efficient and more profitable to the survivors if there fewer dealerships in existence. What is happening now in Chrysler is that the company is implementing those cuts. GM will follow shortly. For the consumer, prices will probably go up, for the surviving dealers there will be less competition for customers and employees, and for the manufacturer there will be less pressure for pricing discounts. If successful, the business may survive and prosper. If not, the business as a whole will close.

It is ironic that those who argue most vehemently in favor of letting economic forces call the shots are now lobbying the government to use its power as an investor to protect some of the inefficiencies that contributed to this problem in the beginning.

Uncle Bill
06-04-2009, 05:16 PM
It is ironic that those who argue most vehemently in favor of letting economic forces call the shots are now lobbying the government to use its power as an investor to protect some of the inefficiencies that contributed to this problem in the beginning.
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That is utter bullcrap, Jeff. What's so damned ironic is that the Obama enablers like you continue foisting and supporting these socialistic mandates on America. What the hell will it take for you statists to open your eyes????

If you don't see this nation slidding down the toilet every time your messianic leader spews his un-American retoric, you are truly and totally blind. And when the time comes for a reckoning, I won't be concerned about how pathetic the administration is, but will be looking for all his enablers. None of you seem to mind putting your great grandkids in bondage, but I certainly do, because as yours go down, so do mine. But then, when do any of you socialists believe in individualistic freedoms...you don't look any further than the next way you can get even. What a sickening lot you all are.

About all I see different between you and your islamic buddies is one of you wear a towel, so no one can see your ignorant guilt.

Here's a Google exercise for you jihad lovers. How many times in the Muslim "good book", the Koran, does it stipulate to "kill the infidels"? You may want to get fitted for a turban, so you aren't considered as being on the wrong side.

You may wonder why I'm so spiteful towards you, Jeff. Because you are the worst of the statists...you appear to be erudite. You fill folks heads with all sorts of smarmy bloviations, and they think you might be onto something. They can see the stupidity in the likes of Remington, or Backpasture, and others of their mentality. But every now and then, you provide some intelligence. But it's still in the socialistic vein, and that's why you present such a danger to this country.

You say you are a believer in the constitution, but see nothing wrong with the government's confiscation of private businesses in the US. Even one such act under Bush would have you and your ilk up in arms crying tyranny to the high courts. And you would be correct.

If Alito or Roberts had said anything close to the remarks made by the current SCOTUS nominee, you and the MSP would be heating up the tar, and plucking every chicken in the country.

Don't you realize what a sham your beliefs are foisting on your family? When will you see what's about to happen?...yet this year?...or will it take some real disaster for you to come to your senses. How much of the constitution must be shredded before you see what you and those in your camp are destroying?

Atlas IS shrugging, Jeff. It's coming down to the wannabes that have no clue how to maintain this nation's greatness. Will it take another 9/11 attack to wake you up, or are you waiting until they drop that bomb on your neighbor's house to realize you have been fooled by the BHO folly?

UB

IowaBayDog
06-04-2009, 07:05 PM
The same thing happened in Cedar Rapids. Bob Mickey Cedar Rapids Dodge/Chrysler was terminated by Chrysler. Karen Mickey, the owner, is a very large GOP supported and a profitable dealership for over 20 years with a good reputation. (We bought our Minivan there). The Franchise was then given to the dealership next door, Mike McGrath Jeep/Pontiac (former). The McGrath's are large Dem supporters, with horrible customer service records and sleezy salespersons. How does this reduce the number of dealerships if they give them to the place next door?
The Mickey's closed their doors on Tuesday.