Government Control

[BobDrye]

Letter from a Dodge dealer

letter to the editor

My name is George C. Joseph. I am the sole owner of Sunshine Dodge-Isuzu, a family owned and operated business in Melbourne, Florida. My family bought and paid for this automobile franchise 35 years ago in 1974. I am the second generation to manage this business.

 

 

We currently employ 50+ people and before the economic slowdown we employed over 70 local people. We are active in the community and the local chamber of commerce. We deal with several dozen local vendors on a day to day basis and many more during a month. All depend on our business for part of their livelihood. We are financially strong with great respect in the market place and community. We have strong local presence and stability.

 

 

I work every day the store is open, nine to ten hours a day. I know most of our customers and all our employees. Sunshine Dodge is my life.

 

 

On Thursday, May 14, 2009 I was notified that my Dodge franchise, that we purchased, will be taken away from my family on June 9, 2009 without compensation and given to another dealer at no cost to them. My new vehicle inventory consists of 125 vehicles with a financed balance of 3 million dollars. This inventory becomes impossible to sell with no factory incentives beyond June 9, 2009. Without the Dodge franchise we can no longer sell a new Dodge as "new," nor will we be able to do any warranty service work. Additionally, my Dodge parts inventory, (approximately $300,000.) is virtually worthless without the ability to perform warranty service. There is no offer from Chrysler to buy back the vehicles or parts inventory.

 

 

Our facility was recently totally renovated at Chrysler's insistence, incurring a multi-million dollar debt in the form of a mortgage at Sun Trust Bank.

 

 

HOW IN THE UNITED STATES OF AMERICA CAN THIS HAPPEN?

 

 

THIS IS A PRIVATE BUSINESS NOT A GOVERNMENT ENTITY

 

 

This is beyond imagination! My business is being stolen from me through NO FAULT OF OUR OWN. We did NOTHING wrong.

 

 

This atrocity will most likely force my family into bankruptcy. This will also cause our 50+ employees to be unemployed. How will they provide for their families? This is a total economic disaster.

 

 

HOW CAN THIS HAPPEN IN A FREE MARKET ECONOMY IN THE UNITED STATES OF AMERICA?

 

 

I beseech your help, and look forward to your reply. Thank you.

 

 

Sincerely,

 

 

 

George C. Joseph

President & Owner

Sunshine Dodge-Isuzu

[slngsht]

well, I for one, side with Chrysler on this one (not with government, even though they are one and the same nowadays).

 

Chrysler is in Bankruptcy and that's how it works. One of the reasons they are in that boat is that the managements' hands are tied in restructuring parts of the business (labor and distribution channel) . They have wanted to thin down the distribution network for ages, but the state governments have prevented Chrysler, GM, Ford from being able to adjust to market conditions.

 

If Chrysler (also a private business) could operate under the same principals this man is complaining about, there would have been far fewer dealers - and the closing would have been gradual and orderly.

 

So, in a way, the protectionism of franchises has contributed to where we have arrived today.

 

It does suck to be him though.

Edited May 19, 2009 by slngsht

[yellowss7]

A neighbor of mine is (soon to be was) a Dodge dealer. Third Generation owners, Same thing. Told, Your Done!!!

 

Unfrigginbelievable. But don't worry I'm sure Obama will fix everything. Hope! Change!

 

Tom

Edited May 19, 2009 by slngsht

[BobDrye]

well, I for one, side with Chrysler on this one (not with government, even though they are one and the same nowadays).

 

Chrysler is in Bankruptcy and that's how it works. One of the reasons they are in that boat is that the managements' hands are tied in restructuring parts of the business (labor and distribution channel) . They have wanted to thin down the distribution network for ages, but the state governments have prevented Chrysler, GM, Ford from being able to adjust to market conditions.

 

If Chrysler (also a private business) could operate under the same principals this man is complaining about, there would have been far fewer dealers - and the closing would have been gradual and orderly.

 

So, in a way, the protectionism of franchises has contributed to where we have arrived today.

 

It does suck to be him though.

 

 

It appears that a Chrysler Dealership is in the same town. I would suspect that Chrysler Corp gave them a higher priority. It still sucks as this Dodge Dealership was not having financial problems. They could’ve been given more than a month to find another brand. I still have problems with federal laws taking precedent over state laws.

[slngsht]

It appears that a Chrysler Dealership is in the same town. I would suspect that Chrysler Corp gave them a higher priority. It still sucks as this Dodge Dealership was not having financial problems. They could’ve been given more than a month to find another brand. I still have problems with federal laws taking precedent over state laws.

They'd be hard pressed to find a major brand that wants to pick up a Chrysler rejected dealership in the next few months. Even Toyota is taking a beating right now.

[slngsht]

I agree with this guy's point of view.

 

http://www.autosavant.com/2009/02/24/how-about-some-restructuring-in-the-auto-retail-arena/

[BobDrye]

Since states have the autonomy to control the dealer franchise laws in their particular state, these changes don’t have to happen at the federal level. If just one large state opened up their eligibility criteria regarding the retailing of new cars, other states would have to follow suit as buyers flocked to that state and the improved retail model. The states get a lot of money from the tax revenue that comes from auto sales and no state wants to lose that money, so…

 

 

 

In Europe they started this, (Block Exemptions) but it never really happened. The requirements that the manufactures’ required for the independents to do warranty repairs were so great that none could meet them.

[MHKflyer52]

Doesn’t DaimlerChrysler (Mercedes) owen the Chrysler Company here in the US and if so why are they not closing some of the Mercedes Dealerships.

Just a though.

[slngsht]

nope. Mercedes cut their loses a while back and ran away

[Mondo]

Actually, Cities and Counties (in California anyway) are the ones that see the tax income. I know for a fact that car sales create the largest sales tax revenue for my town (which doesn't bode well).

A few years ago, during the boom, the State took part of the money away by reducing the DMV fees and then reimbursed the cities the money they lost (another one of those "trust us, we'll take care of you" moves). Got a feeling that's going away with this crisis.

[Kitcat]

This guy got royally screwed. Sure, life's tough, ditto auto business, but if they deliberately tried to screw him they couldn't have done a better job. Especially forcing the million dollar remodeling and telling him to shove his inventory. His bankruptcy seems imminent and then on down the line. Lots of pain for lots of innocent people.

 

Still, something had to happen and it was either sacrifice a select few or watch the whole company drown together. One of the few (only?) things "W" ever said that made sense to me was, when asked about the auto companies' woes: "Just build better product". That was before he got the whole bailout ball rolling tho.

 

Am I the only one skeptical about the likelihood that having Fiat as a partner will help?