Quality Weenie

Cities Morn Dealership Losses

I remember early on when GM and Chrsyler were asking for loans and everyone said just let them go under, the effects won't be that bad.

Well lets see what happens know that 1100 GM dealers and almos 1000 Chrsyler dealers are being cut. People don't understand how much communities got from those dealers.

GM's action compounds the pain for dealers and communities already reeling from Chrysler LLC's plan, announced Thursday, to eliminate 789 retailers by early next month.

Together, the moves promise to dramatically shrink the number of dealerships nationwide. That could boost the profitability of individual stores but also result in higher prices for consumers, who will find it harder to pit dealers against each other or receive steep discounts once competition decreases.

Right off the bat you will be paying more for cars because less compeition means dealers don't have to cut prices to attract buyers.

Cutting 1,100 GM dealerships will result in 63,000 lost jobs, according to the National Automobile Dealers Association.

The company's eventual plan to shut down about 40 percent of its U.S. dealership network will result in roughly 137,000 employees losing their jobs and eliminate an estimated $1.7 billion in sales tax revenue for state and local governments. Plus, GM will lose an estimated $35 billion in sales revenue, NADA said.

137,000 employees from dealerships alone losing their jobs and $1.7 BILLION in lost revence for states and local governments.

Not to mention the lost revenue from the dealerships buying parts from local places, eating out at lunch/dinner, etc.

And lets not forget about all the little league teams, schools, charities, and groups that dealerships sponsor.

And that is just from GM, Chrsyler will post similiar numbers. So cities with both GM and Chrysler dealerships going under what will it do to those cities?

There is a high price to pay by all.

Posted by Quality Weenie at May 19, 2009 05:00 PM | TrackBack