Free Markets, Free People

“Dealergate”: Things To Keep In Mind

Whether or not the decisions to close certain Chrysler dealerships was political motivated is still an open question, and based mostly on anecdotal evidence as well as an incomplete analysis data. Regardless, the evidence available thusfar, when viewed in light of the Obama administration’s previously demonstrated willingness to meddle for partisan gain (UAW anyone?), suggests that in the very least more investigation is warranted.

As the investigation unfolds (the yeoman’s work of which is being done by Doug Ross and Joey Smith), there are couple of things to keep in mind. Although many people have referred to the closing list of dealerships as a “hit list” it makes much more sense to concentrate on the dealerships remaining open and regarding it as a potential “friends Obama supports” list. By way of example, the evidence unearthed by Joey Smith regarding the RLJ-McLarty-Landers enterprise reveals that big time Democrat donors and partisans are reaping enormous benefits from the Chrysler plan in the form of all its competition being wiped out. So who owns this luckiest of dealerships?:

In my analysis of the Chrysler dealers that will remain open, I came across one dealer group that stood out to me.
The company is called RLJ-McLarty-Landers, and it operates six Chrysler dealerships throughout the South. All six dealerships are safe from closing.

[…]

The interesting part is who the three main owners of the company are. The owners are Steve Landers (long-time car dealer, 4th-generation dealer), Thomas “Mack” McLarty (former Chief of Staff for President Clinton), and Robert Johnson (founder of Black Entertainment Television and co-owner of the NBA’s Charlotte Bobcats). Landers has given money to Republicans in the past, but McLarty campaigned for Obama in 2008, and Johnson has given countless amounts of money to Democrats over the years.

Smith has found a similar fortune for Lithia Motors, whose CEO Sidney Deboer is a Democratic donor (although he’s also given to Republicans) and has come out publicly in favor of the Obama administration.

Of course, all of this is still anecdotal, but the planned closings look awfully fishy when the list of canceled dealerships is so totally dominated by Republican donors, and the list of survivors features prominent Democrat supporters.

Regardless of the above, Nate Silver has provided the excuse for Obama supporters to safely ignore this story by declaring the percentage of Republican car dealers to be so high in comparison to Democrats, that there should be little to no surprise when the closing list is so chock full of GOP partisans:

There is just one problem with this theory. Nobody has bothered to look up data for the control group: the list of dealerships which aren’t being closed. It turns out that all car dealers are, in fact, overwhelmingly more likely to donate to Republicans than to Democrats — not just those who are having their doors closed.

[…]

Overall, 88 percent of the contributions from car dealers went to Republican candidates and just 12 percent to Democratic candidates. By comparison, the list of dealers on Doug Ross’s list (which I haven’t vetted, but I assume is fine) gave 92 percent of their money to Republicans — not really a significant difference.

There’s no conspiracy here, folks — just some bad math.

Despite what Silver asserts (i.e. that the control group of non-closing dealerships should be examined), he does no such thing. Instead, he researches the Huffington Post’s Fundrace database for donations from car dealers to arrive at his decision that such occupation gives to the GOP at the tune of 8-1. However, Open Secrets arrives at a much different conclusion, especially over the long term, in which dealers only gave to the GOP at approximately a 3.5-1 clip. At those numbers, one would expect to find somewhere around a quarter of the closings to affect Democrat donors, instead of the 2.36% found thus far:

In fact, I have thus far found only a single Obama donor ($200 from Jeffrey Hunter of Waco, Texas) on the closing list.

Another review of all 789 closing dealerships, by WND, found $450,000 donated to GOP presidential candidates; $7,970 to Sen. Hillary Clinton; $2,200 to John Edwards and $450 to Barack Obama.

Of course, it’s important to remember that statistics do not prove the existence of anything, just its likelihood of existing. Nevertheless, the details uncovered so far suggest that partisanship may have indeed played a role in deciding which franchises remained open.

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60 Responses to “Dealergate”: Things To Keep In Mind

  • Oh… you’re so close.

    Shiny!
    Twirly!

    Grab it!

    Go on.  Do it!

    Shiny, candy like…

    Grab it!

    • When this was first reported, I was skeptical based upon the analysis of the cut dealers only. Now, with the data from the retained dealers rolling in, this is looking like a serious issue.

      We certainly live in interesting times, and Obama fluffers like Pouge are going to be real busy defending their corrupt, incompetent leftist.

      • YES!!

        We got Don on the line.
        Lets see just how long a string we can bring home to the fire.

        Here fishy, fishy, fishy.

        Come on boys.
        Don’t be shy.
        Shiny!
        Twirly!

    • Ah, this one may have legs. 

      They (and I mean the royal “They”, entitled occupants of the land of Oz on the Potomac who think we’re too dumb to figure things out) forget how devastating a riled up pajama-hadeen can be.

      Still, there will be an official explanation needed only if the MSM picks it up, otherwise it’s just a bunch of wacko’s on the internet, like those wackjobs that claimed the TANG documents were produced in MicroSoft Word, or that totally bogus story about Bill Clinton and a White House Intern…sheesh.  Heh. 

      Move on!  Move on!

      • Indeed, I can imagine Pogue reacting in exactly the same way to those events.

        • Oh good.
          We have Grimshaw and looker nibbling away.

          You know, I knew this was going to be fun.  I said it right after Obama was elected.  I knew that some of you Republican=good, Democrat=bad partisans would eventually give way to ridiculous allegations and theories.  You just can’t help it.  To you guys, Obama and the Dems are inherently corrupt and will eventually do something nefarious.
          Now, they’re politicians.  So they are inevitably going to do something corrupt.  But for you guys, it’s going to take an immeasurable amount of bites at the apple before you reach any thing resembling a core.

          And quite frankly, I’ve been somewhat impressed at your restraint so far.
          I mean, there was that whole thing with the ACORN getting some of the stimulus money because of their loyalty to Obama.  Remember, … Michael Wade should.  He posted something, quoting Rob from the aptly named “SayAnything” blog, stating that ACORN recieved the money – which he was WRONG and that fact was pointed out to him. 
          BTW, how’s that going anyway?  Did ACORN take any of that money?

          No?

          Too bad.
          That… That would have helped you.

          Other than that, you guys have been pretty restrained.  Kudos.  At least you’re not the Atlas Shrugs and RedStates… begging for birth certificates and the like.

          But I knew you would come around.
          Now, what you guys are saying is… That despite most dealership owners are Republican, so it would make sense that most of the closures would affect Republicans.  That Obama and his staff would RISK EVERYTHING on a conspiracy to shut down a few dealerships who’s owners gave a little money to Republicans.

          That’s it?  That’s what you’re saying?
          Listen to yourselves.

          Oh this is just cherry.

          Cheers.

          • Bill Clinton risked everything for a Bl*wjob.

            Go figure.

          • In any event, I don’t believe, for a single instant, that anyone is going to be able to tie Barack Obama to this personally, in any way, shape, size or form.

            It’s an exercise in discovering partisan behavior may be going on in….
            horror!
            shock!
            surprise!
            ….Washington DC.

            At worst some mid level jobo will suffer, the dealerships will STILL be closed, the public will barely notice.
            Those of us who believe the administration to be more corrupt than usual will remain convinced of same, those who do not will also remain convinced of same.

            Score?
            Unchanged in the first 10 minutes of play,
            Politicians 10, American Public 0.

          • I mean, there was that whole thing with the ACORN getting some of the stimulus money because of their loyalty to Obama.  Remember, … Michael Wade should.  He posted something, quoting Rob from the aptly named “SayAnything” blog, stating that ACORN recieved the money – which he was WRONG and that fact was pointed out to him.�
            BTW, how’s that going anyway?  Did ACORN take any of that money?

            You should be very careful about the accusations you throw around, even ones buried in bogus links.  Consider that your one and only warning, Pogue.

            The link you were too incompetent to find is here.  It includes the bit where I admit that I was too hasty in declaring the $2B number as fact.

            As for the rest of your nonsense, I’ll refer you back to the same discussion where you professed an undying fealty to the “truth” of the matter.  Funny how that’s gone by the wayside.

            BTW, I’ve actually done some research into where that stimulus money went.  Have you?  Would it surprise you to learn that ACORN (including it’s thinly-disguised affiliates) has been a recipient?  Just in the sense of unearthing the “truth” of course.

          • You should be very careful about the accusations you throw around, even ones buried in bogus links.  Consider that your one and only warning, Pogue.
            The link you were too incompetent to find is here.  It includes the bit where I admit that I was too hasty in declaring the $2B number as fact.
            The “This is our house now” post wast the one I was linking to.  After I initially wrote it, I tried to cut something that I realized was inaccurate.  Whatever was lost in the interface, I don’t know.  Not to knock the format or anything, but sometimes the copy and paste doesn’t work too well here.
            And what is this, “one and only warning”?  What does that mean?
            What are you going to do?  Waterboard me???
             
            Did you or did you not claim that ACORN “received 2 billion dollars” like your buddy Rob claimed, only to then change it later after I pointed out your mistake?
             
            You then changed it to “to receive 2 billion.”
             
            So…
            BTW, I’ve actually done some research into where that stimulus money went.  Have you?  Would it surprise you to learn that ACORN (including it’s thinly-disguised affiliates) has been a recipient?  Just in the sense of unearthing the “truth” of course.
             
            Was it 2 billion???
            Show us.

          • looker:
            Bill Clinton risked everything for a Bl*wjob.
            Go figure.
             
            Yeah well… that I get.
            After all, I can’t imagine some dealership bobbin on my knob.
             
            Although, I can imagine and have experienced one of them bending me over.
            Which, to say the least, I’m not a fan of.
             
            Cheers.

          • Hey Pogue, if you read my single sentence again, with care,  you’ll probably note that nothing in it alludes to my buy in of this particular theory.  It wouldn’t surprise me if it’s true, but the evidence isn’t there yet if it is.  

            What was your initial reaction when rumors started floating about Clinton and and the fake but accurate documents?  It’s hard to believe you reacted differently than you’re reacting now, but I don’t know.

          • The “This is our house now” post wast the one I was linking to.  After I initially wrote it, I tried to cut something that I realized was inaccurate.  Whatever was lost in the interface, I don’t know.  Not to knock the format or anything, but sometimes the copy and paste doesn’t work too well here.

            That’s an interesting explanation.  Not terribly convincing given what you actually included as the link, but interesting nonetheless.

            And what is this, “one and only warning”?  What does that mean?
            What are you going to do?  Waterboard me???

            Hmm.  I hadn’t thought of that.  Let me get back to you …

            Did you or did you not claim that ACORN “received 2 billion dollars” like your buddy Rob claimed, only to then change it later after I pointed out your mistake?

            You then changed it to “to receive 2 billion.”

            I did not change anything in the post, Pogue.  I honestly have no idea why you think that I did.  I’m also honestly offended at being accused of dishonesty.  hence the warning.

            Was it 2 billion???
            Show us.

            You brought it up.  You show us.  I’m not your research monkey.

    • You’re going through an awful lot of effort to make anyone who’s curious about this matter look crazy by acting … well, sorta crazy yourself.  Are you worried or something?

      If so, don’t be.  There may not be anything to this story at all.  The evidence adduced so far suggests otherwise, but that doesn’t mean the Obama administration has done anything wrong. 

      Seriously, Pogue.  Just relax.  It’ll be okay.

      • You’re right.
        I’m acting hysterically.

        I’m laughing hysterically at the comedy show I’m seeing.

        Seriously.  Good show.
        Keep it up.

        Cheers.

  • The full look at both classes of dealers is under way ,but it will take time since in total there are over 2000 dealers involved.

    According to industry stats at OpenSecrets.org over 80% of donations for auto dealers go to Republicans.  Until a full accounting is done we wont know how many Republican donors have survived the purge.

    If the closure list includes say 75% of the historic Republican donors then we have an issue.  But until the full vetting is done people are getting ahead of themselves.

    • I don’t think we’re getting head of it, it’s just smoke on the horizon.
      But to try and claim it’s all just smoke at this point, is no more correct than to say there’s a huge fire.
      I’m with you, let them look, we have time.   There’s no rush.   It’s not like the information can change.
      The list is what it is, the contributions are what they are.  If there’s substance it will be known soon enough.

      If, suddenly, a ‘new list’ comes out in the middle of this it won’t change the old list, which is already known, the damage is still done (though I’m becoming of the opinion not enough of us will notice or care).

      But so far it doesn’t look like there’s a movement among the sane to draft articles of impeachment.
      In any event were it true, Lord Barack would merely have a lackey tossed under the coach to placate the media and the general populace.

    • According to industry stats at OpenSecrets.org over 80% of donations for auto dealers go to Republicans.

      Um, no. Not even close. In one two-year cycle (2003-2004) over the past twenty years dealers gave 80-20 to the GOP, and in one other two-year cycle (1999-2000) they gave 79-21. Over the rest of the period the ratio is much closer to about 70-30 which approximates to a slightly better than 2-1 ratio in favor of the GOP. Not surprisingly, dealers were more generous to Democrats during the Clinton administration, and less so during the Bush years.

      Now, take a look at the list of closings and “survivors” and see if there is a similar ratio of Republican to Democrat donors. At this point, the lists appear to be quite skewed in favor of Dems. Until further evidence surfaces, then that’s all we have to go on. Accordingly, it makes sense to continue digging to see whether the theory holds any water that political motivations played a part in deciding which dealerships should close.

      It’s really that simple.

    • According to industry stats at OpenSecrets.org over 80% of donations for auto dealers go to Republicans

      Out of curiosity, is that all auto dealers, or only Dodge/Chrysler/Plymouth?

      • http://www.opensecrets.org/industries/indus.php?ind=T2300

        That is a summary status for ALL automobile dealers over a number of years history.

        For example the total for all donations was only a little over 9 million dollars, many dealers don’t contribute at all.

        It is reasonable ,but not yet proven till all the cross reference work gets done, that the bulk of the Chrysler donor COULD have been lumped into the 789 closings.  We just don’t know until all the dealers both closed and remaining open get done.

        • I suggest that the data at OpenSecrets is worthless in this discussion.  If they had a breakdown of what the dealers for Dodge/Chrysler/Plymouth/Jeep contributed, that would be useful.  But to say “88% of contributions from all car dealers go to the Republican Party,” when we’re not talking about all car dealers is meaningless.

  • In a sense I agree with Pogue – but for maybe different reasons.

    In the vast scheme of things – So What?
    Will there be an investigation from the House?  NO!  The Democrats control the House.
    Will there be an investigation from the Senate?  NO!  The Democrats control the Senate.
    Will the White House initiate an investigation?  Laughably, NO!
    Will the Justice Department begin an investigation?  Before that can happen you got to determine what laws have been broken?

    This is hardball Politics.  Obama and company can call the shots because they hold all the cards – Control of the House, Senate, and White House.  And with the White House comes the Justice Department.  The real kicker and travesty of this entire situation is they control the media.  The Fourth Estate has sold out.  There aren’t any 21st Century Woodward & Bernsteins to come to the rescue – unless it is a Republican Administration, then non-scandals like Valerie Plame fill the airwaves and printed page.

    • “In the vast scheme of things – So What?”

      Maybe “what” is that we left that behind when we left mercantilism?

  • So is antitrust law completely irrelevant now? Shuttering specific dealers to restrict competition in markets and selecting “winning” independent distributors in an effort to constrain competition is completely prohibited by the Sherman Act, from my limited non-attorney (but executive in a large, regulated corporation) opinion.

    • >>>> So is antitrust law completely irrelevant now?

      Well, yeah, haven’t you paid attention to what happened over the recent bankrupcy from the WH.

    • They’re all members of the same firm, therefore there is no restriction on dividing up the service area of the single firm’s franchises.  In short, you can’t compete with yourself.  Believe or not, there is legal precedent setting forth this concept.

  • Here’s the issue, mathematically, from Protein Wisdom blog:

    There is surely a math person here that could answer a question like this. In a jar there are 3000 marbles, split at 75% black and 25% white (2250 black and 750 white). What are the odds that if someone began selecting marbles, and picked out 750, that not a one of them would be white? Or, that only one of them would be white?


    Comment by DrSteve on 5/28 @ 12:37 pm # |Edit This
    JD, I calculate the answers to your questions as follows:
    > phyper(0,750,2250,750) # This is the likelihood of drawing no white marbles in a “handful” of 750 pulled from an urn with 2250 black marbles and 750 white ones.
    [1] 2.219479e-111

    > phyper(1,750,2250,750) # This is the likelihood of drawing one white marble in a “handful” of 750 pulled from an urn with 2250 black marbles and 750 white ones.
    [1] 8.339695e-109

    I’ll let Pogue figure out the meaning of the above.
     

  • DEALERGATE SMOKING GUN: STATISTICAL PROOF THAT WHOEVER SELECTED DEALERSHIPS TO BE CLOSED LOOKED AT WHO OWNED THEM AND NOT JUST THE NUMBERS
    I think this item – from JONAH at The Corner (who is skeptical of the political angle) – actually proves that SOMEBODY paid very VERY close attention to the identity of which Chrysler dealers would not be renewed; (weirdly, Jonah posted this from a reader as if it buttressed the skeptic’s interpretation of events):

    Of the 789 Chrysler dealers who were notified that their contracts will not be renewed, 38 are minority owned…

    At the end of April, there were 154 minority dealers in Chrysler’s 3,181 total U.S. dealer body network….

    You’ll see that 4.8% of the auto dealerships closed were minority owned.

    Total percentage of all Chrysler dealerships that are minority owned? 4.8%

    THAT’S RIGHT: THE % OF MINORITY OWNED DEALERS CLOSED IS EXACTLY THE % MINORITY OWNED.

    THIS CANNOT POSSIBLY BE AN ACCIDENT, OR RANDOM.

    REPEAT: THIS CANNOT POSSIBLY BE AN ACCIDENT, OR RANDOM.

    REPEAT: THIS CANNOT POSSIBLY BE AN ACCIDENT, OR RANDOM.


    THIS PROVES THAT
    WHOEVER DECIDED WHICH DEALERSHIP
    WOULD GET CLOSED LOOKED AT
    WHO OWNED WHICH DEALERSHIP.


    REPEAT:
    THIS PROVES THAT WHOEVER DECIDED WHICH DEALERSHIP WOULD GET CLOSED LOOKED AT WHO OWNED WHICH DEALERSHIP.

    REPEAT: THIS PROVES THAT WHOEVER DECIDED WHICH DEALERSHIP WOULD GET CLOSED LOOKED AT WHO OWNED WHICH DEALERSHIP.

    IT WAS NOT BASED ON NUMBERS ALONE.

    WHOEVER DECIDED NOT TO CLOSE A DISPROPORTIONATE AMOUNT OF MINORITY OWNED DEALERSHIPS, MAY HAVE VERY WELL DECIDED TO CLOSE A DISPROPORTIONATE AMOUNT OF “GOP” DEALERSHIPS OR DEALERSHIPS IN GOP COUNTIES OR IN GOP CD’S.

    THE PLAINTIFFS MUST DEMAND THAT THE BANKRUPTCY JUDGE GET THIS INVESTIGATED.

    THE PRESIDENTIAL TASK FORCE AND THE WHITE HOUSE SHOULD BE SUBPOENAED.

    – Posted by Reliapundit @ 5:43 PM ; Permalink;

    • Sorry, I didn’t quite get that. Could you repeat it, please?

      • Heh!

        He’s the only one here nearly as hysterical as Pogue.

        Yours, TDP, ml, msl, & pfpp

  • All of these fascinating facts are so juicy and tempting. The sad part is that there are some terribly boring and mundane questions which just might be a tad more pertinent and can not be answered from the data provided by either side of the partisan hackery festival.

    Which dealerships have shown a profit or loss compared to the rest of their industry over the last sales periods?

    Which dealerships are located in an area where the company has two or more dealerships servicing a potential customer base equal to or greater than the number of buyers in other areas currently being serviced by one dealer?

    Which geographic areas have been tracking stable or improved sales for Chrysler vs. other American or Import dealerships?

    Answer those questions and compare the answers to the closure list and then you’ll know if there is likely to be any fire behind the smoke.

    • Those are good questions, Jazz.  But there’s a problem with the premise.  Dealerships aren’t a drain on the car maker, they are in fact the true customers of the car maker.  If a dealership can’t stay in business by selling cars then it disappears.  There is no need for the car manufacturer to close them. 

      Aside from that, there are several dealerships on the closing list that claim to be among the top dealers in the business, or that they have been steadily doing more business, or other “we’re doing gangbusters” stories that suggest the businesses are not being closed for the reasons as stated by Chrysler.  I don’t know if any of their stories are true, but they have filed objections to the reorganization plan in the C11 case, so there must e some evidence to back them up.  I expect once the court hears those claims we’ll have a better idea.  Until then, the distribution of Dem donors to GOP donors on the closing/surviving lists is compelling.

  • *Yawn*   The right’s version of all the Haliburton and Cheney stuff, but even more silly and obtuse.

    Stick with stuff like this, and you’ll wander in the wildnerness a long time.

    • *Yawn*  Advice from Scott Erb.  I’ll get back to you when you matter.

    • Erb, your a professor, correct?

      Even for a soft science I assume you had to take/show competence in statistics in order to get that PhD.
      So, dazzle us. Use that statistics thing to counter what was posted above.

      • Why bother?  Back when the nutcases were offering those conspiracy theories that Foster (?) guy was killed by Hillary Clinton rather than committing suicide they said “prove us wrong.”  Uh, no.  It’s not worth the time because it’s a back room blogosphere game, not serious.   But hey, enjoy your conspiracy theories — they got a lot of you through the Clinton years.

        • From Protein Wisdom:

          There are 3000 Chrysler dealerships. 750 got told they’re getting closed. Using Nate Silver’s numbers, there are 2640 “Republican” dealerships, and 360 “non-Republican” ones. Of those dealerships, 690 R and 60 non-R dealerships were closed.
          Using R, we can calculate the probability that, by random chance, 60 or fewer non-R dealerships would be closed out of 750
          phyper (60, 360, 2640, 750)
          Unfortunately for Nate, and for the TP big talkers, the result is 3.671535e-05. Or 9 in 250,000.
          So yes, that is a significant difference.
          Some of the posters over at Nate’s are claiming 3500 dealerships. Keeping all percentages the same, we get
          phyper (70, 420, 3080, 875)
          That takes the chance down to 8.738693e-06. Less than 9 in 1,000,000. IOW, fail.

          Numbers can be hard so I understand your reluctance.
          PhD degree…paying dividends daily.

        • He’s a f*ck*ng political “scientist” (an oxymoron if there ever was one). I’d be very surprised if 50% of poly sci Ph.Ds use statistical analysis on a regular basis, let alone in their thesis.  So I suspect the ‘why bother’ response is really a cover for an inabilty to apply the proper tools. 

    • Which was essentially your response to the Swiftboat Vets.

      How’s the second term of Kerry’s Presidency working out for ya?

      • Ouch!  That’s gonna leave a mark!

      • It’s good Kerry lost.   Iraq was going to collapse by 2006 anyway, and the economy would have collapsed regardless of who was President.  If Bush hadn’t won a second term, there would be a Republican in the White House, and Obama would simply be an Illinois Senator.  More here.

  • Sc ott and Pogue,

    I suggest that whenever there is a possibility of corrupt politcal practice, its probably a good idea to have people look into the matter.

    With the closing of car dealerships, there probably will be nothingl. But for you to comment that there’s nothing before all the data is in is a bit crazy.

    We are now having the government getting involved in major once private enterprises – not just government contractors – so I think serious scrutiny is called for. Sorry, if you don’t like it – but I wouldn’t trust the GOP to be non-political when closing military bases or car dealerships either – the temptation is strong and probably even more so for Obama who believes in economic justice and knows the press is covering for him.

    I am also curious as to whether congress is getting involved there, like they do with military bases, or protecting their home industries.

    • “Scott and Pogue,
      I suggest that whenever there is a possibility of corrupt politcal practice, its probably a good idea to have people look into the matter.”

      Scott and Pug depend on that adage that goes:
      PAY NO ATTENTION TO THAT MAN BEHIND THE CURTAIN!!!
       

  • I am a little surprised that none of the free-market/Libertarians here have not questioned the entire process of closing down dealers. Correct me if I am wrong, but I thought that  dealers do not cost Chrysler any money.  How is Chrysler going to benefit from closing all those dealers, all of whom are doing their best to sell Chrysler products and make money for Chrysler? Why shouldn’t the market determine which dealer goes out of business? What am I missing?

    • I’ve been raising that issue since the first post.

      It’s not entirely clear why shutting down dealerships helps Chrysler anyway, since they are essentially the real customers of the carmaker, but it seems to me that those who plan to profit from the new venture would have something to say about the plan in the bankruptcy case.

    • It’s not so much that they are being closed down, but that their contracts with the auto makers are not being renewed.  As I understand it, the decision was made by automobile industry executives to undo an expansion of dealerships which often led to a number of competing dealers offering the same makes within a small radius.   In order to provide a variety of cars in a cost efficient manner, it’s better to have fewer dealers with a larger variety.  I thought there were costs inherent to maintaining these contracts, but I’d need to look into that.

      Is the market driving this?   At some level, yes.   To be profitable the automakers need to be slimmer, and need to be able to better package their product against competitors.     Dealers in trouble aren’t able to offer as good of deals, have a large inventory, or do other things to promote sales.   This isn’t new — dealerships have been closing (contracts not renewed) for well over a year.   It was only in the hundreds, but as this January 2008 article shows, dealerships were being closed as early as 2007.

      • “In order to provide a variety of cars in a cost efficient manner, it’s better to have fewer dealers with a larger variety.  I thought there were costs inherent to maintaining these contracts, but I’d need to look into that.”

        Great non-grasp of economics (economy of scale), Doc.

      • And all 759 dealerships have their contracts all ending on the same day in June?  How convenient. 

        Sorry, Erb.  No dice there.  Their contracts are being severed.  And all that crap about overlapping dealerships is just that – crap!  each dealership is a business/company into itself.  Dealerships come and go all the time – just not all at once.  My uncle once owned a Chevy dealership that went bust – and not because of any recession or depression but because of the General Manager stealing over a million from the company and taking off.  My uncle could not make up the loss and went under.  But for him, his dealership was bought out by a competitor and they continued to make a go of it, profitably.  It is true that the Big Guy can take away your sign and that has also happened, with cause, but for the most part either you make a profit and stay in business or you don’t and you go under.

        That is until now.

        • Hmmm, it’s your word against industry analysts and the car company executives about the impact of too many dealerships.  I don’t find you very persausive.

          • The same industry analysts who failed to see that GM &Chrysler were going bankrupt? The same car company executives who drove their companies into bankruptcy? You find them persuasive?

            Priceless.

          • You don’t find that persuasive?  Then educate yourself.  Go down to your local Volvo dealershp (someone like you just has to drive a friggin’ Volvo) and ask your local dealer how things work in the Auto Business.  Take the time to do something you obviously don’t understand – research.   They will be glad to tell you about the ways of the outside world.

            More likely you will just take the word of a bunch of Obamacrats whose expertise in the field consists of them having stayed at a Holiday Inn Select last night.

      • LOL

        “It’s not so much that they are being closed down, but that their contracts…are not being renewed”.

        I am sure that will be a great relief to all those unemployed dealers and their former employees.

        “As I understand it…”.

        Well, that explains it. One of your funniest lines ever.

        Thanks, I will be chuckling over this post for hours.

        • IOW, my post demolished yours, and you aren’t willing to admit it.   I note as well you ignore that dealerships were being closed long before Obama came to office.   Maybe you need to do your homework.

          • “demolished”.

            As I understand it, the decision was made by automobile industry executives to undo an expansion of dealerships which often led to a number of competing dealers offering the same makes within a small radius.

            Really?  No, see, your post purported that “automobile industry executives” made these decisions for business reasons.

            The allegation in play is that the Obama administration made these decisions for political reasons

            Do try and keep up with the point of the whole discussion.

  • Chrysler is being killed by CAFE. Reducing the number of dealers is just rearranging deck chairs.

  • Setting aside the “Dealergate” and long term prospects of GM & Chrysler in the “capital” markets, allow me to ask the $24,000,000 question ..

    if the UAW has a much larger stake in Chrysler than they seem to be getting in GM, what on earth will make them not favor Chrysler over GM in negotiations, etc. ???

    Especially with all the stories of GM making more cars in China …

    This is shaping up to be the “conflict-of-interest” case of the century.