No one wants to believe that the truth is so different from the fairy tale being spun by the executives from GM and Chrysler, no one thinks we could all be fooled, let alone the administration or Congress. Unfortunately that’s exactly what’s happening
Dealers don’t cost manufacturers any money.
Fritz Henderson and Jim Press failed to convince Congress or demonstrate how reducing dealers saves money. Filling a car up with gas is a cost associated with selling a car, not how many dealers they have. Dealers pay the freight to get the car shipped. Dealers order parts and vehicles, and become the warehouse for their products. The factory offers no subsidy for dealers, in fact, the dealers pay fees to the factory, almost $40,000 a year, not including the purchase of inventory.
Too few dealers, not too many.
2 out of 3 cars on the road are Domestic. There were 13,000 domestic dealers at the end of 2008. At the end of their cuts, there will be 9,600. How will Detroit rise again if there are fewer domestic dealers than Import? There are already 10,000 import dealers. Dealers are not “branches”.
If you’re going to be like Toyota, build Toyota quality.
It’s the car, the product, that determines success. Dealers have established relationships with owners of vehicles, who remain loyal, despite the lower ratings in Consumer Reports. GM has lost market share for 30 years. GM has seen ratings in Consumer Reports go down for 30 years. This isn’t a coincidence, customers know quality. Toyota focused on the East and West Coast. On Rockville Pike there are three Toyota dealers, there will be 1 Chrysler Dealer. How does that match Toyota’s model?
Why would they do this?
They need a scapegoat for Wall Street to keep investing, to avoid blaming the very same managers who remain employed, to get their retention bonuses. This is the same management that drove both companies into bankruptcy. The dealers are not bankrupt, the manufacturers are.
Some of the material I've been researching is making it out into the web, and the public...the more information the better.