Seething mad at automakers and we have to take it
1 comment May 16th, 2009
I thought I’d worked it out of my system, this bitterness against Chrysler and General Motors, the corporate fathers of the Midwest that first sustained, then disappointed, then betrayed me.
I thought I’d finally accepted that decades of dominating market share hid emasculated but egotistical management, which bred companies committed to inefficiency, waste and, apparently, bankruptcy.
But the hits just keep on coming. Last week, the two began gutting their dealer ranks, eliminating franchise agreements at nearly 800 Chrysler and more than 1,000 GM dealerships.
And now I’m frustrated all over again.
It’s a business model that tends to shave off the bottom line, as same-brand dealerships in the same town compete for the same customer, each one offering a sweeter deal to get him through the door. Particularly in this market, where new-car sales make up about a quarter of overall vehicle sales.
I don’t disagree with the move — and it’s only the opening salvo. For far too long, the domestic automakers have allowed their dealerships to proliferate, chasing a dream of market share that has eluded them for decades. GM, which once cornered 51 percent of the U.S. market, has plans to cut 40 percent of its 6,000 or so dealers before all’s said and done.
A drop in market share to 22 percent, which GM notched last year, does tend to get noticed — even though the automaker would have probably continued its slavish devotion to bad business practices if the recession hadn’t forced it to beg for money from the federal government.
It makes me want to bite someone. But I’ll settle, once again, for more civilized questions for these two titans of industry: What took you so long? How could you break faith with all of us like this?
By putting off tough decisions — allowing the union to stuff worker contracts with the legacy costs that are crippling them, bloating their dealership stock, refusing to see consumers who would abandon truck and sport utility vehicles — they are on their knees. Where they belong.
And they took the rest of us with them, as they must. The tens of thousands of blue- and white-collar workers on the unemployment lines is only one of the human costs they are inflicting.
The hit to local car dealerships, with their commitment to the towns and cities in which they ply their trade, will be much more far-reaching. Baseball teams, soccer clubs, golf outings, charity walks — all of them made possible in some way with the help of these dealerships.
The carnage continues.
Contact Business Editor Annette LaCross at alacross@rrstar.com or 815-987-1295.
