Nancy Phillips :
WHATEVER HAPPENED TO THE LAND OF THE FREE?
Nancy Phillips :
Dear President Obama:
You have been elected as president of these United States. Every state is your state now from Maine to California and all that come between. Would you not agree that every citizen in every state deserves to be protected under the oath of office you took as our new President?
But something is very wrong here. What is being done under the guise of bankruptcy and ‘for the good of the country’ to those dealers who are the foundation of our auto industry is nothing short of criminal.
Beginning in the Northeastern corner, look closely at the devastation being perpetrated upon some of our most productive citizens through the abrupt and brutal termination of Chrysler dealers and pending termination of General Motors dealers.
Consider the list of the 789 Chrysler dealerships who received letters announcing their eminent closure in which New Hampshire, Maine and Vermont are scheduled to lose 12 dealerships. But that does not take into account the second phase of closures which will include the many dealers who will be unable or unwilling to meet the requirements, guidelines and demands of NEWCO - the new Chrysler/Fiat company. It also does not include the first barrage of General Motors dealers who have been notified of their own pending demise or the second tier fall-out from that event which will surely be as devastating as it will prove to be under NEWCO. Nor does it acknowledge the number of other dealers of all franchises who will fail to survive or who will not be renewed as the economy tailspins as a result of this automotive upheaval.
If we take seriously the ability of the government to remake our domestic auto industry in the image of Toyota Motor Sales, USA, Inc. and we redefine the market areas based on the Toyota dealer network then Maine, New Hampshire and Vermont will likely loose between 34% and 39% of their dealers. This is what that would look like:
Estimated Effect of Loss of Dealerships
State Dealerships Estimated Closures Percent Reduced
New Hampshire 155 60 39%
Maine 135 53 39%
Vermont 88 30 34%
Estimated Effect on Unemployment Rate
State Population Number
New Hampshire 1,300,000 650,000 2,500 Up .38%
Maine 1,300,000 700,000 2,300 Up .33%
Vermont 600,000 325,000 1,300 Up .40%
Whatever happened to the land of the free – or was that yesterday? What right have you to desecrate the lives of those who have supported their employees, their communities, their country and their President? And for what? When all is said and done please show me the cost savings, the benefit to the taxpayer and the advantage to our country.
Someone may have told you that there are too many dealers and that the domestic industry must now model itself after the successful one – Toyota. And while it is true that Toyota and Honda have eaten our lunch, the reason is not because there are too many Chrysler, General Motors and Ford dealers. The number of dealers has no more bearing on what has gone wrong with the automobile industry at the hands of its franchisors and our country’s fair trade policies than the number of convenience stores did under the Walmarting of America. And while Walmart put many independent entrepreneurs out of business it did not do so under the auspices of our government.
Yes, I know those state franchise laws are in the way, but did any of your car czars even think to ask each one of those dealers whose financial lives you have emasculated if they would have accepted a reasonable termination with a guarantee to buyout their vehicle and parts inventories if confronted with the alternative of their franchisor filing bankruptcy?
And has anyone described to you the totality of the ruin perpetrated against these good citizens, their employees, their customers and their communities?
We can move across the country in this manner predicting the carnage as we go. In larger states the percentages loom lower but that does nothing to mitigate the painful loss of employment, loss of a good friend to the community, loss of a major contributor to the local economy, loss of the convenience of a dealership nearby and loss of a privately held business to a government that now seems to call all the shots.
Message to Dealers:
Dealers of all franchises need to stand together. If today your own dealership is not at stake, then perhaps it may be your turn on another day. Too many dealers are quietly harboring great hope for their own future as part of a new economy with fewer of their fellow dealers to compete against.
While this industry may survive with fewer dealers, can the survivors feel comfort and success knowing it was delivered on the backs of other dealers some of whom must file personal and corporate bankruptcy and others who will simply never overcome the enormous personal and financial losses that will inevitably occur?
Nancy Phillips Associates represents franchised automobile dealers by orchestrating dealership sales and closures for those wishing to divest, facilitating targeted acquisitions on behalf of buyers and determining the true market value of their business.
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