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Ken Newcomb
06-09-2009, 02:53 PM
I have know my first person who is personally being put out of business by Obama. He runs the Chrysler dealership in Tindal, SD and has for many years. He is really devistated. It feels a whole lot different when you actually know someone it is happening to.

YardleyLabs
06-09-2009, 03:19 PM
I have know my first person who is personally being put out of business by Obama. He runs the Chrysler dealership in Tindal, SD and has for many years. He is really devistated. It feels a whole lot different when you actually know someone it is happening to.

I feel for your friend. Unfortunately, another way to look at it is that 100% of Chrysler dealers are now effectively out of business because of the bankruptcy. The only question now is whether or not some of them will manage to survive. I suspect that the bond holders are hoping that the Federal government will pay them off to avoid liquidation since I suspect that the amount they will receive from the rescue package exceeds what they would get through liquidation. I continue to have reservations about the rescue in any form and certainly hope that additional money will not be committed to cover bond holder losses or to try to keep all dealers open.

road kill
06-09-2009, 03:33 PM
WHO is deciding which Dealers to close and WHY??

The Dealers are not the cause of this.

YardleyLabs
06-09-2009, 04:30 PM
WHO is deciding which Dealers to close and WHY??

The Dealers are not the cause of this.
As of now, the choices appear to be:

1. The sale to Fiat does not go forward because of litigation. All Federal subsidies cease so that Chrysler can no longer make payroll. Chrysler ceases operations and is liquidated. All dealers, employees and vehicle owners are SOL. (In the short term this is the cheapest option for taxpayers)

2. The sale to Fiat proceeds for most but not all of Chrysler assets and operations with government financial assistance to offset some of the acquisition costs and to finance costs associated with warranties on current Chrysler vehicles. Some current employees and dealers continue as part of the surviving operation controlled by Fiat. Secured bond holders and some unsecured creditors receive a mix of cash and equity financed by taxpayers to offset their losses. Before the sale closes, Chrysler terminates the employees and dealers that Fiat does not wish to retain so that Fiat is not stuck with those liabilities. Those who are terminated and other claims against Chrysler are basically SOL with no recourse against any of the assets acquired by Fiat.

3. In response to political pressure, the government puts still more billions of taxpayer money into Chrysler to reduce the number of dealerships terminated and to bail out more creditors. (This is the most expensive short term option)

Under the protection of Chapter 11 bankruptcy, the current management of Chrysler remains in current control of the company under the supervision of the court and with a level of accountability to creditors. The interests of shareholders became largely moot when the company entered bankruptcy.

As the provider of Debtor in Possession financing, the Federal government has a seat at the table but is not in control of the company. However, its financial interests actually take precedence over the interests of other stakeholders with respect to the funds it is providing since the company declared bankruptcy. The funds provided prior to bankruptcy are largely unprotected. Once a decision is approved by the court with respect to the sale to Fiat and/or liquidation, the Federal government's role in operations ceases except to the extent that there are post-bankruptcy financing agreements that provide the government with an on-going stake.

In answer to your question, the presumption is that Chrysler made the decision to terminate dealerships to make the surviving operation more attractive and profitable to Fiat. If the sale proceeds, Fiat could presumably decide to close more dealerships or to open new ones. If the commpany is liquidated, the issue is irrelevant since all dealerships will be terminated.

Cody Covey
06-09-2009, 04:51 PM
I have a question. What does having dealerships open cost the car companies. They are separate companies correct?

YardleyLabs
06-09-2009, 05:05 PM
I have a question. What does having dealerships open cost the car companies. They are separate companies correct?
They are related entities with deeply intertwined financial, operational, and marketing dealings. From the perspective of the bankruptcy, the most salient issues are that having a large number of dealers in a given geographical area reduces dealer margins and ultimately increases financial pressure on the manufacturer to provide off-setting discounts. From the beginning, the entire dealership strategy was a way of limiting competition. Realistically, manufacturers would like to optimize the number of dealers in a way that provides easy consumers access, a high standard for dealership operations, and a low cost of sales and warranty support. The general perception, as I understand it, is that the number of dealerships now in existence is much higher than is desirable given the volume of sales.

Cody Covey
06-09-2009, 05:59 PM
but why are those things being offered by the manufacturer. Shouldn't the dealers being marketing and what not for their own company. The manufacturer markets but they will be marketing no matter how many dealers they have. Not trying to be argumentative, really don't understand what costs the manufacturer of cars have that will be reduced by closing dealerships.

Franco
06-09-2009, 08:27 PM
I have a question. What does having dealerships open cost the car companies. They are separate companies correct?


Many of the Chrysler dealerships that ended today were Floor Planned (financed) by Chrysler.

Only giving the dealers a short time to sell thier inventory was a financial hardship for the dealers.

IowaBayDog
06-09-2009, 08:28 PM
Dealer saturation is not the issue Yardley. The majority of the dealerships being closed are being handed to other entities across the street. Cedar Rapids Dodge/Chrysler was put out of business and their neighbor next door was handed the Dodge/Chrysler franchise and started selling those vehicles the next day. The number of franchises in our area has not changed one bit. Pure political payoffs.

YardleyLabs
06-09-2009, 08:43 PM
Dealer saturation is not the issue Yardley. The majority of the dealerships being closed are being handed to other entities across the street. Cedar Rapids Dodge/Chrysler was put out of business and their neighbor next door was handed the Dodge/Chrysler franchise and started selling those vehicles the next day. The number of franchises in our area has not changed one bit. Pure political payoffs.

What was the payoff and who provided it? As far as I can tell, neither made any political donations during the campaign. Mickey was one of 27 Chrysler dealers closed in Iowa. McGrath, who owns a Jeep franchise, was asked about expanding his operations which is not inconsistent with what I was saying. Are you suggesting that the President decided that McGrath should be given Mickey's franchise?

Cody Covey
06-09-2009, 11:18 PM
Many of the Chrysler dealerships that ended today were Floor Planned (financed) by Chrysler.

Only giving the dealers a short time to sell thier inventory was a financial hardship for the dealers.

makes sense i suppose then thanks.

IowaBayDog
06-10-2009, 04:33 PM
What was the payoff and who provided it? As far as I can tell, neither made any political donations during the campaign. Mickey was one of 27 Chrysler dealers closed in Iowa. McGrath, who owns a Jeep franchise, was asked about expanding his operations which is not inconsistent with what I was saying. Are you suggesting that the President decided that McGrath should be given Mickey's franchise?

The Mickey's are large contributors to the Iowa GOP, Karen Mickey sat on the local GOP Committee for several years, McGrath's are large contributors to the Iowa Dems.

How is handing a dealership from one successful person to another not so successful person across the street reducing the number of dealerships? Jeep does not directly compete with the majority of the vehicles Dodge/Chrysler build so they weren't saturating the market, and if they were they still are. 27 dealers closed but in most cases they were handed to someone across the street so they didn't really close. What's the criteria for the closures? It sure wasn't profitability.

Uncle Bill
06-11-2009, 05:44 PM
The Mickey's are large contributors to the Iowa GOP, Karen Mickey sat on the local GOP Committee for several years, McGrath's are large contributors to the Iowa Dems.

How is handing a dealership from one successful person to another not so successful person across the street reducing the number of dealerships? Jeep does not directly compete with the majority of the vehicles Dodge/Chrysler build so they weren't saturating the market, and if they were they still are. 27 dealers closed but in most cases they were handed to someone across the street so they didn't really close. What's the criteria for the closures? It sure wasn't profitability.


But leave it to a Pennsylvania lib to KNOW what's happening in your part of Iowa, Dan.

BTW, Ken. Have you heard the auto dealers being closed down in Sodak are filing a lawsuit? Based on what little I've read so far, the local franchisee has the law in this state on their side, and the manufacturer sending out a notice doesn't necessarily make it so. Time will tell.

UB

YardleyLabs
06-11-2009, 05:54 PM
But leave it to a Pennsylvania lib to KNOW what's happening in your part of Iowa, Dan.

BTW, Ken. Have you heard the auto dealers being closed down in Sodak are filing a lawsuit? Based on what little I've read so far, the local franchisee has the law in this state on their side, and the manufacturer sending out a notice doesn't necessarily make it so. Time will tell.

UB

Actually, the FEC publishes lists of all contributors to presidential campaigns and the Mickeys do not show up with any contributions while their competitor only shows up with $500 in contributions to the dealership PAC in 2005. I know nothing about that area of the country, but do know how to follow the money when it goes through public channels.

IowaBayDog
06-12-2009, 01:18 PM
Actually, the FEC publishes lists of all contributors to presidential campaigns and the Mickeys do not show up with any contributions while their competitor only shows up with $500 in contributions to the dealership PAC in 2005. I know nothing about that area of the country, but do know how to follow the money when it goes through public channels.

Yes because that FEC list is so accurate and no political money exchanges hands except whats on the list.:rolleyes: The owner of Mickey's (or former owner) is the daughter of the founder and uses her Mickey last name for the business but is married and probably uses that name for political contributions to keep her name out of these things. The Chicago political machine is a little smarter than that. Its hard to believe she chaired the local GOP and contributed nothing, though I couldn't blame her for not contributing to McCain.

Just for a point of fact, how does Mr. Rezco show up on your list as having contributed?

YardleyLabs
06-12-2009, 02:22 PM
Yes because that FEC list is so accurate and no political money exchanges hands except whats on the list.:rolleyes: The owner of Mickey's (or former owner) is the daughter of the founder and uses her Mickey last name for the business but is married and probably uses that name for political contributions to keep her name out of these things. The Chicago political machine is a little smarter than that. Its hard to believe she chaired the local GOP and contributed nothing, though I couldn't blame her for not contributing to McCain.

Just for a point of fact, how does Mr. Rezco show up on your list as having contributed?

There is only one Rezco listed:

REZCO, ANTOIN S
, 60610

RUSH, BOBBY LEE (http://query.nictusa.com/cgi-bin/can_detail/H2IL01042)
VIA CITIZENS FOR RUSH (http://query.nictusa.com/cgi-bin/com_detail/C00257121)
03/31/1998 1000.00

I don't know if that is who you are looking for. Karen Mickey is not listed as either Karen Mickey, Karen Patton (her son's last name), Mickey Chrysler Dodge, or 1st Avenue Chrysler Inc. (the legal name for the dealership). Pat McGrath has given annually to the dealers association, but not to a political candidate or party.

MCGRATH, PAT MR.
CEDAR RAPIDS, IA 52402
PAT MCGRATH CHEVROLET/DEALER

DEALERS ELECTION ACTION COMMITTEE OF THE NATIONAL AUTOMOTIVE DEALERS ASSOCIATION (http://query.nictusa.com/cgi-bin/com_detail/C00040998)
12/12/2005 250.00 26980019565 (http://images.nictusa.com/cgi-bin/fecimg/?26980019565)
08/15/2006 250.00 26930377488 (http://images.nictusa.com/cgi-bin/fecimg/?26930377488)
07/26/2007 250.00 27990485258 (http://images.nictusa.com/cgi-bin/fecimg/?27990485258)
08/12/2008 250.00 28992149737 (http://images.nictusa.com/cgi-bin/fecimg/?28992149737)

There is one other McGrath in a different part of Iowa that contributed $200 to the Democrats, but no one else with the same last name.

Only contributions of $250 or more show up in the FEC database.

EDIT:

There are contributions from a Bruce McGrath who looks like he may be related to Pat McGrath (e.g. father), s follows:

MCGRATH, BRUCE
CEDAR RAPIDS, IA 52403

DNC SERVICES CORPORATION/DEMOCRATIC NATIONAL COMMITTEE (http://query.nictusa.com/cgi-bin/com_detail/C00010603)
04/02/2009 250.00 29933783986 (http://images.nictusa.com/cgi-bin/fecimg/?29933783986)
MCGRATH, BRUCE
CEDAR RAPIDS, IA 52403
MCGRATH AUTO GROUP/AUTO RETAILER

RICHARDSON, BILL (http://query.nictusa.com/cgi-bin/can_detail/P80003411)
VIA RICHARDSON FOR PRESIDENT INC. (http://query.nictusa.com/cgi-bin/com_detail/C00431577)
11/11/2007 500.00 28930354081 (http://images.nictusa.com/cgi-bin/fecimg/?28930354081)
MCGRATH, BRUCE
CEDAR RAPIDS, IA 52403
MCGRATH AUTOMOTIVE GROUP

GRASSLEY, CHARLES E (http://query.nictusa.com/cgi-bin/can_detail/S0IA00028)
VIA GRASSLEY COMMITTEE INC (http://query.nictusa.com/cgi-bin/com_detail/C00230482)
10/01/1998 500.00 98020252441
MCGRATH, BRUCE MR.
CEDAR RAPIDS, IA 52403
NOT EMPLOYED/RETIRED

OBAMA, BARACK (http://query.nictusa.com/cgi-bin/can_detail/P80003338)
VIA OBAMA FOR AMERICA (http://query.nictusa.com/cgi-bin/com_detail/C00431445)
06/04/2008 250.00 28991594993 (http://images.nictusa.com/cgi-bin/fecimg/?28991594993)

IowaBayDog
06-12-2009, 09:02 PM
There is only one Rezco listed:

REZCO, ANTOIN S
, 60610

RUSH, BOBBY LEE (http://query.nictusa.com/cgi-bin/can_detail/H2IL01042)
VIA CITIZENS FOR RUSH (http://query.nictusa.com/cgi-bin/com_detail/C00257121)
03/31/1998 1000.00

I don't know if that is who you are looking for. Karen Mickey is not listed as either Karen Mickey, Karen Patton (her son's last name), Mickey Chrysler Dodge, or 1st Avenue Chrysler Inc. (the legal name for the dealership). Pat McGrath has given annually to the dealers association, but not to a political candidate or party.



Ah yes, so Tony Rezco gave ZERO dollars to Barrack Obama, lots of creditibility in your source there Jeff. :rolleyes: I guess when you drink the Koolaid you'll believe anything.

YardleyLabs
06-12-2009, 10:11 PM
Ah yes, so Tony Rezco gave ZERO dollars to Barrack Obama, lots of creditibility in your source there Jeff. :rolleyes: I guess when you drink the Koolaid you'll believe anything.
Based on his track record I suspect that any donations would have been made to non-Federal campaigns. Those are not reported to the FEC. He may also have given to various organizations that avoid FEC reporting requirements by not taking explicitly campaigning postures in federal elections. That, for example, was the way much of the swift-boating ads were financed to attack Kerry. Reporting is only as good as the campaign disclosure laws.