Letter from a Dodge dealer

[buzzbee]

I certainly don't accept the bailout Obama gave them... I have opposed these bailouts consistently whether they were for the auto manufacturers or the dealerships.  That's more than I can say about the republicans here... who I'm sure would be laying into this guy if he had written his letter from the point of view of a democrat. 
[/quote]

I still didn't see where the guy asked for money. I think the process is what he is talking about. The idea of the government dictating that procedures for bankruptcy circumvent normal procedures. The investors here were the first to get locked out of the process.
 can you imagine how hard it will be to get any one to invest in new ventures when there is now precedent frr the government to be able to jump in and take control?
 When Chrysler was failing before,the government gave them a lone.(Wrong then too).But the company was expected to pay the money back.The government did not assume stock ownership.And if I recall,the money was paid back
 Would you be willing to invest in GM again(other than the forced investment?)
 This has done more to destabilize the market than letting these guys fail.But that may have been by design. Undermine the capitalist system and you have created a need for the government to take over the economy.

[deknow]

[edit] sorry...nevermind (in my best gilda radner voice)
deknow

[kathyp]

That's more than I can say about the republicans here... who I'm sure would be laying into this guy if he had written his letter from the point of view of a democrat.  

near as i can tell, he wrote the article from the point of view of a business man.  you are pretty quick to make assumptions about people.  

i agree also with buzzbees point.  there is a pretty big difference between a loan and government ownership.  if you want to see the results to investment and productivity when the government nationalizes companies, you have recent examples in Venezuela. 

[SgtMaj]

I still didn't see where the guy asked for money.

Do you really not see how asking to stay in business when your business costs the taxpayers money is asking for money, or are you just being obtuse for the sake of being difficult?

I think the process is what he is talking about. The idea of the government dictating that procedures for bankruptcy circumvent normal procedures.

Bankruptcy itself is when the government (by way of a federal judge) dictates that procedures with regard to the company or person in question circumvent normal procedures. 

The investors here were the first to get locked out of the process.

That's what happens in bankruptcy... the people who loaned that person or business money don't get their money back.

can you imagine how hard it will be to get any one to invest in new ventures when there is now precedent frr the government to be able to jump in and take control?

I can imagine how easy it is... The S&P 500 is up more than 30% in the past 3 months.

When Chrysler was failing before,the government gave them a lone.(Wrong then too).But the company was expected to pay the money back.The government did not assume stock ownership.And if I recall,the money was paid back

How long ago was this that you're talking about?  Because Chrysler hasn't paid back any loans made in the last 5 years.

Would you be willing to invest in GM again(other than the forced investment?)

I was never willing to invest in GM to begin with... I am more apt to invest in them now, but still less apt to invest in them over other sectors of the market or other markets.

This has done more to destabilize the market than letting these guys fail.But that may have been by design. Undermine the capitalist system and you have created a need for the government to take over the economy.

Yes, Bush did a great job of undermining the capitalist system.  We definately agree there. 

[dragonfly]

Bankruptcy itself is when the government (by way of a federal judge) dictates that procedures with regard to the company or person in question circumvent normal procedures. 

That's what happens in bankruptcy... the people who loaned that person or business money don't get their money back.

But secured investors, in usual cases of bankruptcy get preference in a bankruptcy proceedings. In this case, the federal government is the one backing the bankruptcy. This defies usual procedure and is circumventing law. It is tossing precedent out the window, in favor of the UAW.

[kathyp]

Because Chrysler hasn't paid back any loans made in the last 5 years.

this may come as a shock to you, but history didn't start in the last 5 years.  do your  homework.

Do you really not see how asking to stay in business when your business costs the taxpayers money is asking for money, or are you just being obtuse for the sake of being difficult?

how is a profitable business costing the taxpayers money?  granted, not all of the dealerships may be profitable.  that's something the markets take care of.  many of those being closed have been in business for year.  in some cases, generations.  they are profitable and they are the hope of GM and Chrysler.  if a company (government) destroys that part of the business that is responsible for getting the product to the consumer, that begs the question; "what is the intent of the government?".

as for costing the taxpayer money; if the government didn't own the company, the taxpayer would not be on the hook for anything.  welcome to the world of socialism!   the taxpayer will be responsible for everything.

The S&P 500 is up more than 30% in the past 3 months.

i can tell you are not an investor!

or are you just being obtuse for the sake of being difficult?

this is the description of most of your arguments.  full of feeling and lacking facts.  being young is not an excuse for lacking knowledge. 

[SgtMaj]

Because Chrysler hasn't paid back any loans made in the last 5 years.

this may come as a shock to you, but history didn't start in the last 5 years.  do your  homework.

This may come as a shock to you, but that's why I asked "when"? 

how is a profitable business costing the taxpayers money?  granted, not all of the dealerships may be profitable.  that's something the markets take care of.  many of those being closed have been in business for year.  in some cases, generations.  they are profitable and they are the hope of GM and Chrysler.  if a company (government) destroys that part of the business that is responsible for getting the product to the consumer, that begs the question; "what is the intent of the government?".

Please go back and read the posts prior to this one, because that question has been answered numberous times and doing so again would just be beating a dead horse.  Sorry, but I'm sure the only reason you're asking this question again is to start the circle of this debate all over again... if you want to do that, I suggest you do so quietly by yourself by scrolling back a few pages and reading the posts over again... repeat as many times as you see fit before you're willing to move on.  I'm sorry you're having a hard time understanding or accepting facts, but that's the way it is... I posted links and references, so you can do as much research as you like.

Or you can ignore facts and go with your feelings like most republicans seem to.

But what the hell... just to sumarize one more time, whether or not the owner of a dealership is making money has absolutely nothing to do with if the dealership is costin Chrysler money.

as for costing the taxpayer money; if the government didn't own the company, the taxpayer would not be on the hook for anything.  welcome to the world of socialism!   the taxpayer will be responsible for everything.

And that right there proves that you know they are costing Chrysler money, and thus the taxpayers, you were just trying to be difficult and keep the controversy going before... and throwing in a little misdirection in the process.

By the way, whether the government took ownership of Chrysler or whether they just kept throwing money at them every time they lose money, we'd still have to pay to keep these 789 dealerships open.

i can tell you are not an investor!

I do quite well with my investments actually.  Last year was the first and only year I've ever lost money on my investments, and it was far less than the average loss.  The three years before that I made between 22 and 24% on my investments.  Of course, I didn't realize those kinds of gains by investing in companies that were so obviously out of touch with consumer demand as GM was.

As far as the S&P500 being up 30% from 3 months ago... that's simple reading of a news story, anyone can do that... even you.  Of course you know that, you're just trying to get controversy going here... aren't you?

this is the description of most of your arguments.  full of feeling and lacking facts.  being young is not an excuse for lacking knowledge. 

You mean like your entire post here?  Where's a fact?  Show me a fact in anything you wrote here?  Any one?  No?  Of course not.

[kathyp]

you didn't do your homework on the closings.  you posted links that support your position.

here are the results of dealership closings.  1.  it destroys competition between dealers and costs the consumer money.  2.  it puts people out of jobs.  3.  it bankrupts dealers who HAVE ALREADY PAID upfront for inventory.

dealerships are a franchise.  they pay their own people.  pay their own insurance.  pay for their own inventory. 

to the extent that they promote competition, then yes, they can cost the company some money.  to the extent that they provide warranty work, yes, they can cost the company money.....however, the government has now promised to back warranty so we are on the hook either way.

the history of Chrysler is public.  look it up.

By the way, whether the government took ownership of Chrysler or whether they just kept throwing money at them every time they lose money, we'd still have to pay to keep these 789 dealerships open.

they should not do either.  the market works when you let it.  the market also takes care of failing dealerships.  withdrawing franchises from successful dealerships will hurt consumers, workers, and taxpayers.

[dragonfly]

For anyone interested, and just for grins, here's a personal opinion blog-type site that is actually doing some informal statistics about the dealership closings.
Warning- if you are offended by rather loose or offenseive language, or by skeptical sarcasm, don't go there.


http://zerohedge.blogspot.com/2009/05/i-am-marlas-observations-on-artifical.html

excerpts:

Control of the list would present the opportunity for a bit of mischief by the automotive task force. Still, Zero Hedge thought it much more likely a "crony" list would be employed, granting automotive pardons for the democratically connected or perhaps to habitual donors. Still, positive Democratic bias in this respect is probably more realistic than negative Republican bias. Megan McArdle expressed similar sentiments last week and Cody Hatch comments over on Megan's site:

Anecdotally, there are Democratic-owned dealerships which are not being closed, but which are seeing all or most of their competitors closed. Equally anecdotally there are profitable-Republican owned dealerships which are being closed. That's troubling, but as must be forever pointed out, the plural of anecdote is not data. Until - and unless - someone does some statistical analysis of both the dealers which are being closed and the ones which are being left alone, this is just a collection of troubling anecdotes. (Okay, a surprisingly large collection of troubling anecdotes, but still...)

We agree. So, as this is a matter of some gravity, we decided to do exactly this.

Then we got to thinking. Steven Rattner, the Car Czar, is married to Maureen White, one-time national finance chairman of the Democratic National Committee. What does Maureen do now? From her website:

Maureen White is currently Chairman of the Board of Overseers of The International Rescue Committee (IRC), a member of the North American Advisory Board for the London School of Economics, and a National Finance Chair of the Hillary Clinton for President Campaign. (emphasis ours)

That website looks dated, but you get the idea.

Again, we want to point out that our findings are preliminary and subject to change. But whatever the result, the Administration has made themselves very vulnerable by taking charge of the dealership closing decisions.

[buzzbee]

http://articles.moneycentral.msn.com/Investing/Extra/iacocca-losing-chrysler-cars-pension.aspx
Boy for someone who does so much of his homework,I don't see how you could not find one of these articles. And guess what? Iacocca  was not a government agency.He was a business man!!

[Brian D. Bray]

http://articles.moneycentral.msn.com/Investing/Extra/iacocca-losing-chrysler-cars-pension.aspx
Boy for someone who does so much of his homework,I don't see how you could not find one of these articles. And guess what? Iacocca  was not a government agency.He was a business man!!

People who want to make a point ignore any information that doesn't support that point.

I expect soon that that those bloggers will be using the technique put forth by the Cartoon "Non Sequitar" wherein they will make statement presented as fact and then ignore anything that doesn't support the statement (fact).