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"The bankruptcy process generally gives companies wide latitude to terminate contracts. Chrysler has offered dealers no compensation."
GM isnt offering compensation either.
"GM said it planned to drop about 1,100 of its smaller and less profitable dealerships by letting their franchise agreements expire when they come due in October 2010."
Chrysler (and GM) is telling them, not the government.
With the government's consent. After all, the government is a major stake holder.
Chrysler and GM should let the markets work and let the dealers go under or turn their dealerships into service center only for those who cannot survive. They problem with letting their franchising agreement expire is that is will be harder for Chrysler and GM in the future to gain that market share. You cannot sell cars effectively in an area without a dealership. Instead, it creates room for the competition to move in and set up shop.
If true, this is stunning. Part of me says it can't be true. I'm trying to find ways to verify or disprove it.
It does jive with President Obama's stated intention to "return the wealth to its 'rightful' owners", and otherwise "spread the wealth around". But I frankly didn't expect him to do it in such a baldfacedly larcenous way.
Can anyone provide any evidence that either supports or disproves this?
My name is George C. Joseph. I am the sole owner of Sunshine Dodge-Isuzu, a family owned and operated business in Melbourne, Florida. My family bought and paid for this automobile franchise 35 years ago in 1974. I am the second generation to manage this business.
We currently employ 50+ people and before the economic slowdown we employed over 70 local people. We are active in the community and the local chamber of commerce. We deal with several dozen local vendors on a day to day basis and many more during a month. All depend on our business for part of their livelihood. We are financially strong with great respect in the market place and community. We have strong local presence and stability.
I work every day the store is open, nine to ten hours a day. I know most of our customers and all our employees. Sunshine Dodge is my life.
On Thursday, May 14, 2009 I was notified that my Dodge franchise, that we purchased, will be taken away from my family on June 9, 2009 without compensation and given to another dealer at no cost to them. My new vehicle inventory consists of 125 vehicles with a financed balance of 3 million dollars. This inventory becomes impossible to sell with no factory incentives beyond June 9, 2009. Without the Dodge franchise we can no longer sell a new Dodge as "new," nor will we be able to do any warranty service work. Additionally, my Dodge parts inventory, (approximately $300,000.) is virtually worthless without the ability to perform warranty service. There is no offer from Chrysler to buy back the vehicles or parts inventory.
Our facility was recently totally renovated at Chrysler's insistence, incurring a multi-million dollar debt in the form of a mortgage at Sun Trust Bank.
HOW IN THE UNITED STATES OF AMERICA CAN THIS HAPPEN?
THIS IS A PRIVATE BUSINESS, NOT A GOVERNMENT ENTITY.
This is beyond imagination! My business is being stolen from me through NO FAULT OF OUR OWN. We did NOTHING wrong.
This atrocity will most likely force my family into bankruptcy. This will also cause our 50+ employees to be unemployed. How will they provide for their families? This is a total economic disaster.
HOW CAN THIS HAPPEN IN A FREE MARKET ECONOMY IN THE UNITED STATES OF AMERICA?
I beseech your help, and look forward to your reply. Thank you.
Sincerely,
George C. Joseph
President & Owner
Sunshine Dodge-Isuzu
SUNSHINE DODGE INC
840 SO HARBOR CITY BLVD 41373 DT
MELBOURNE, FL 32901-1999
GEORGE C JOSEPH
This is true, and there have been several callers on talk shows that have told their story. This is just one of many.
These people (thanks to Obama) are getting the shaft, and losing everytihng in the process. What Obama is doing is illegal, and it is putting literally thousands of people out of work (I thought Obama promised to "create" jobs ).
Moreover, it is affecting local economies negatively.
The government is quite literally "stealing" peoples businesses, and giving their business to others, with no compensation.
So much for "Hope and Change", huh? How's it working for you?
They are a franchise. The company can terminate the agreement. (as far as I know)
And they are doing it.
Guess they (the dealer) didn't read the small print......
If you want to blame somebody, blame the wallstreet banks and investors that gambled everything away.
How the hell are you going to blam wallstreet for franchise dealers losing their franchises without compensation?
p.s. the franchise owners are suing the franchisee, i.e. Chrysler..
.....One dealership owner, I heard on the radio, said his dealership was one of the most profitable in his area, and yet he is being closed down, and other faltering dealerships were given the green light to take over his business.......
It may turn out to be quite interesting to see just who gets to take over the businesses that are being taken away from others.
These people (thanks to Obama) are getting the shaft, and losing everytihng in the process. What Obama is doing is illegal, and it is putting literally thousands of people out of work (I thought Obama promised to "create" jobs ).
Ah the Obama Dowist* argument of the day.
Obama is condemned for bailing out the automakers, When he bailsout the automakers he is condemned because some lose their jobs as a result. Of course some losing their jobs is less than all losing their jobs but then logic isn't a part of the Dowist equation.
*The Dowist Argument® named after Rev Lorenzo Dow (1777–1834) who in a sermon said 'You can and you can't - You shall and you shan't - You will and you won't - And you will be damned if you do - And you will be damned if you don't.'"
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