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Plan to ax dealers not Chrysler's decision -lawyer

hypocritexposer

Well-known member
Plan to ax dealers not Chrysler's decision -lawyer
Tue May 26, 2009 4:00pm EDT

* Lawyer says plan to cut dealers not Chrysler's decision

* Dealers call termination plan 'unconstitutional'

By Nick Zieminski

NEW YORK, May 26 (Reuters) - A lawyer for Chrysler dealers
facing closure as part of the automaker's bankruptcy
reorganization said on Tuesday he believes Chrysler executives
do not support a plan to eliminate a quarter of its retail
outlets.

Lawyer Leonard Bellavia, of Bellavia Gentile & Associates,
who represents some of the terminated dealers, said he deposed
Chrysler President Jim Press on Tuesday and came away with the
impression that Press did not support the plan.

"It became clear to us that Chrysler does not see the wisdom
of terminating 25 percent of its dealers," Bellavia said. "It
really wasn't Chrysler's decision. They are under enormous
pressure from the President's automotive task force."


He added the government task force, which he criticized for
having no members with retail experience was, in effect,
attacking U.S. entrepreneurs.

"What is the next task force? Shoe stores? Pizzerias?"
Bellavia said at an event in Manhattan to publicize the dealers'
concerns ahead of a bankruptcy court hearing.

Chrysler [CBS.UL] notified its dealers this month it plans
to eliminate 25 percent of its retail showrooms and is seeking
permission from a U.S. bankruptcy judge to terminate franchise
agreements with 789 of 3,181 dealers as of June 9.
[ID:nN25534875]

A spokeswoman for Chrysler said the decision to cut a
quarter of the dealers was "not coming from the task force."

"Our position is that the market can't support the number of
dealers that are out there," said spokeswoman Carrie McElwee.
"This has been our plan for more than 10 years to combine
Chrysler, Dodge and Jeep under one roof."

The decision about cutting dealers took into consideration
factors like location, customer satisfaction, and sales
potential, she said. Nearly half of the terminated dealers also
carry non-Chrysler brands, and most rely on used vehicles for
the bulk of their sales.

The dealers will seek to stop the sale of Chrysler assets to
a new company -- owned by its union, Italy's Fiat SpA (FIA.MI),
and the U.S. government -- at the bankruptcy court hearing on
Wednesday.

"The problem we have is the free enterprise system is not
run by the government, it's run by business entrepreneurs,"
Bellavia said. "The dealers themselves will decide if it's not
productive to go forward."

Chrysler has more than double the number of dealers of
rivals Toyota, Nissan and Honda, which each have about 1,200
retail outlets, while General Motors (GM.N) has about 6,000. But
it should be up to owners to decide when to exit the business if
there is not enough demand, Bellavia said.

Dealers argue closing dealerships will devastate local
communities, with some 50,000 direct job losses nationwide, and
as many as 200,000 indirect job losses. Part of their legal
argument rests on the Fifth Amendment of the U.S. Constitution,
which guarantees due process before government can take away a
person's property.

"We feel there has been a denial of constitutional
due-process rights," Bellavia said.

'UNCONSTITUTIONAL'

"I think it's unconstitutional," said Jim Anderer, owner of
Island Jeep in Lindenhurst, New York.

"The Fifth Amendment clearly states you cannot take another
person's property without due process or compensation. Even in
eminent domain, there is an appraised price on the property
being taken by the state."

Anderer said he has been in business for 22 years and
employs 48 workers. He intends to fight the plan.

"My business is being stolen from me under the guise of the
bankruptcy laws, given to another dealer down the street,"
Anderer said.

Chrysler has argued it needs a smaller dealer network to
return to profitability. In 2008, it sold about 1 million new
cars at some 3,300 dealers.

"They've given me no time to sell off (my inventory)," said
Robert Engel, who runs two dealerships in Tenafly and Wyckoff,
New Jersey. Both dealerships, which employ about 60 people, are
profitable, he said.

Engel estimates two-thirds of his dealership revenue comes
from service, and said he intends to stay open.

"Bankruptcy laws are being manipulated to carry out a
marketing plan," he said. "If they're going to terminate
dealers, it should only be severely underperforming dealers."

Chrysler wants fewer but bigger dealers in central locations
near highways that would carry Dodge, Chrysler and Jeep vehicles
under one roof, Engel added, but the decision about who survives
was "random" and set a precedent of government interference in
free markets.

"We're not giving up," Engel said.
(Reporting by Nick Zieminski, editing by Matthew Lewis)
 

Sandhusker

Well-known member
Looks like there's quite a few people that would give you an arguement if you tried to tell them Obama follows the rule of law.
 

kolanuraven

Well-known member
Ohhhh...a " lawyer" said....and a ex-banker has backed it up.....and it's all on the internet....

Well, must be true then!!! :roll: :roll: :roll: :roll: :roll:
 

Sandhusker

Well-known member
kolanuraven said:
Ohhhh...a " lawyer" said....and a ex-banker has backed it up.....and it's all on the internet....

Well, must be true then!!! :roll: :roll: :roll: :roll: :roll:

Use your own head. Look what happened to those dealers and tell me that their businesses weren't stolen from them. Then tell me about the due process and compensation.
 

Red Barn Angus

Well-known member
I hope the dealers fight this all the way. It makes no sense to me for the factories to eliminate their only customers. It is theft pure and simple authorized by Zero and his band of crooks under the guise of bankruptcy laws.
 

hypocritexposer

Well-known member
There's a congressman that's going to be asking some tough questions too.

Rep. Vern Buchanan, R-Fla., a businessman who has owned car dealerships since 1992, learned Thursday that his Venice, Fla., Dodge dealership was among those scheduled to be terminated.

"It's an outrage. It's not about me. I'm going to be fine," said Buchanan, the dealership's majority owner. "You're talking over 100,000 jobs. We're supposed to be in the business of creating jobs, not killing jobs."

Rep. Candice Miller, R-Mich., ran into Buchanan and told him, "I heard you're going to lose your Dodge franchise."

"I said, 'Oh, really?'" Buchanan recounted.

Shelby Curtsinger, the Dodge dealership's operating partner, said he was stunned by the decision because the dealership had been profitable since it opened in 1999 and typically sells about 700 vehicles a year, more than twice the sales of an average Chrysler dealership.

http://www.10news.com/automotive/19463330/detail.html
 

garn

Well-known member
From the article below is the problem with the Big Three. There is only one Toyota dealership in the Des Moines metro of 500,000 plus population and the Toyota dealership is the single biggest saler of new cars in the area.

Chrysler has more than double the number of dealers of
rivals Toyota, Nissan and Honda, which each have about 1,200
retail outlets, while General Motors (GM.N) has about 6,000. But
it should be up to owners to decide when to exit the business if
there is not enough demand, Bellavia said.

If they (Chrysler and GM) would've just declared bankruptcy last fall and closed on their own the dealerships they thought that were under performing and kept the govt. out of the private business sector, we would not be halfway down the slippery pole that we already are with all of this government bailout crap.

From my hometown in SW Iowa (like most of rural Iowa, the population base is rapidly shrinking), there are three Chyrsler dealerships within 25 miles and all 3 are in towns of less than 7,000, with one town inching downward towards 5,000.

I don't know how many new cars each of these three dealership's had last year or any year for that matter, but given that all 3 are within an hour's drive to Omaha, i'm not sure that really matters as there is no way the small town dealers can compete with the big city and their prices to begin with.
 

Steve

Well-known member
garn said:
From the article below is the problem with the Big Three. There is only one Toyota dealership in the Des Moines metro of 500,000 plus population and the Toyota dealership is the single biggest saler of new cars in the area.

Chrysler has more than double the number of dealers of
rivals Toyota, Nissan and Honda, which each have about 1,200
retail outlets, while General Motors (GM.N) has about 6,000. But
it should be up to owners to decide when to exit the business if
there is not enough demand, Bellavia said.

If they (Chrysler and GM) would've just declared bankruptcy last fall and closed on their own the dealerships they thought that were under performing and kept the govt. out of the private business sector, we would not be halfway down the slippery pole that we already are with all of this government bailout crap.

From my hometown in SW Iowa (like most of rural Iowa, the population base is rapidly shrinking), there are three Chyrsler dealerships within 25 miles and all 3 are in towns of less than 7,000, with one town inching downward towards 5,000.

I don't know how many new cars each of these three dealership's had last year or any year for that matter, but given that all 3 are within an hour's drive to Omaha, i'm not sure that really matters as there is no way the small town dealers can compete with the big city and their prices to begin with.

over the last five years I have worked for, and done promotions for a "small town dealership", in that time the corporate reps has brought in two mega dealers, all located near major cities.. they hurt local sales.. but as of today.. both are closed and in bankruptcy.. yet not one of the old "small town" dealers is closing.. but then iI doubt the had the debt a mega dealership had..

if you doubt my word, give one of them a call...
http://www.psnnewsletter.com/newsletters/12040_2007_6_9_0_42_16.html
609-267-9991

the other one Atlantic Powersports,.. (732) 920-7669

Mega dealers often lose the trust of customers after a few years of fast deals. while small town dealers know they must provide service and value to stay in business in a competitive market..
 

hypocritexposer

Well-known member
* There are two published lists of Chrysler dealerships. One includes the 789 dealers which will be closed by June 9. Those dealers who will be able to retain their franchises and acquire the assets of closing dealers in their areas are on the other. Both are in .PDF format.

* An attorney for closed dealers deposed Chrysler president Jim Press and said that his impression is that the decisions on which Dealers will stay and which will go really wasn’t Chrysler’s, as the company is under considerable pressure from President Obama’s automotive task force.

* Many of the Chrysler dealers on the closing list were heavy Republican donors. Some are sitting congressmen.

* Among the dealers which were selected to remain in business are a number of outlets owned and operated by a partnership which includes among the partners former Clinton White House chief of staff Mack McLarty and Robert Johnson, founder of Black Entertainment Television (BET). Both have strong Democrat ties. McLarty campaigned for Obama, and Johnson has contributed heavily to Democrats, including Obama.

* The latest finding from the closure list is that there appears to be “an extremely high correlation between dealers closing and congressional districts BHO lost”:

Now it seems that anger about this abuse of Presidential power is starting to build, maybe the mainstream media will even pick it up:

See the 2 lists
http://www.allpar.com/news/index.php/2009/05/chrysler-dealers-to-be-cut-and-kept/
 
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