Yesterday, Chrysler announced the termination of nearly twenty-five percent of the company's dealer-franchises. Today comes the news that GM will drop many dealers as well:
...The ailing GM and Chrysler say they have far too many dealers. Chrysler announced on Thursday that it is cutting 789 of its 3,181 dealers, but Friday may be far worse: GM is scheduled to begin notifying more than 1,000 dealers that they are being dropped.This article in the Washington Post relates some of the impact on family-owned car dealerships in the Washington, D.C., area:
As sensible as the cuts might seem, most of the dealers are small businesses, and many...have deep roots in the community. They typically employ about 50 people, and some are substantial donors to local causes. Their potential loss is sending ripples of concern through many towns....
The National Automobile Dealers Association has argued that the automakers should not simply cut stores. Instead, they argue that the companies should allow market forces to cull their ranks.
Instead, the automakers are reviewing each of the dealerships, examining their market, sales and financial wherewithal, and deciding which should stay or go.
In 1915, at the dawn of the automobile era, Lewis Reed opened a Dodge dealership on Rockville Pike.Similar stories played out all over America yesterday and will be repeated today....
Yesterday his grandsons gathered startled employees together to tell them that the firm's 94-year run as a Chrysler-Dodge franchise was coming to an end. Chrysler was dumping them.
"It's not a good feeling," said Richard L. Gartner, one of Reed's grandsons, and the president of Reed Brothers Dodge.
Just after meeting to inform employees about 3 p.m. yesterday, he looked fazed, his face flushed.
"We have been with Chrysler for a very long time," he said, pausing. "We were kind of looking forward to a 100-year anniversary."
Read the rest at Always On Watch.