Are private Chrysler dealerships being taken from owners with NO compensation? (gallon, money)

[mateo45]

Nobody put a gun to Chrysler or GMC forcing them to accept government aid (or conditions). Simple fact of life, if you borrow money, there's likely gonna be "terms" from the lender (especially if you don't have a very good track record).

Ford was able to avoid borrowing, and seems to be managing it's affairs without any interference whatever. Chrysler & GM could be doing the same, except for their failures, and not the feds.

[vec101]

The government is getting the blame for the dealership closings because the goverment is directly involved in the GM situation and they are calling the shots. That is common knowledge - it is all over the news (see info below).

Let's think about this: The Feds are calling the shots for GM. GM closes dealerships. If the Feds are calling the shots, how can GM alone be blamed for dealerships being cut off by GM?

Furthermore, imagine it is GM alone cutting off the dealerships. The fact remains the Feds have a heavy hand in what GM is doing. So, why do the Feds not tell GM that due to the current economic situation they cannot cut off the dealerships? Cutting off the dealerships will add to the number of unemployed - why is the govt not rescuing these people by not allowing GM to close the dealerships?

Either way you look at it, the Feds have a hand in the dealership closings.
Interesting how we are not hearing about this involvement in the media -- all the blame is being put on GM.

BTW, the Feds were also directly involved in the Chrysler bankruptcy/sale.

Here is a just a few of the many articles about the Federal involvement (and possible ownership) of GM and their hand over Chrysler.

NEW YORK, May 19 (Reuters) - General Motors Corp's (GM.N) plan for a bankruptcy filing involves a quick sale of the company's healthy assets to a new company initially owned by the U.S. government,........
The government's plans include giving stakes in the new company to GM's union and bondholders, although the ownership structure of the company is still being negotiated, said the source who is familiar with the company's plans. CORRECTED - UPDATE 1-GM bankruptcy plan eyes quick sale to gov't | Deals | Mergers & Acquisitions | Reuters

President Obama has said in the past that he has no interest in running car companies and that he wants the government out of GM and Chrysler's affairs as soon as possible, but his administration appears willing to take nearly complete control of at least one of the companies before that happens. No details have been revealed yet about how long the government will own a portion of the "new GM" and continue to exert influence on the company. Government Motors? Feds Could Own GM After Bankruptcy, Forgive Emergency Loans | Motortrend News & Auto Blog - Wide Open Throttle

The Pryors and other small investors in GM have come to Washington this week to lobby for a better deal from the Obama administration's autos task force, which they say has run roughshod over their financial claims.
Under the restructuring deal being shaped by the task force, GM's bondholders are asked to trade their bonds for a small equity stake. washingtonpost.com

With his words, Obama underscored the extent to which the government is now dictating terms to two of the country's iconic corporations, much as it has already taken an ownership stake in banks, GM, Chrysler Get Ultimatum From Obama on Turnaround - Automotive * US * News * Story - CNBC.com

Once a "new GM" is created, Fritz Henderson will likely take the helm, sources say. His board, though, would have to be approved by the government and earlier reports indicate that the board would likely be comprised of representatives of GM, GM's unions and the government.
Government Motors? Feds Could Own GM After Bankruptcy, Forgive Emergency Loans | Motortrend News & Auto Blog - Wide Open Throttle

and the latest reports indicate that all of the company's good assets would be sold to the U.S. Government, at least temporarily, and the $15.4 billion in taxpayer loans would be forgiven. Government Motors? Feds Could Own GM After Bankruptcy, Forgive Emergency Loans | Motortrend News & Auto Blog - Wide Open Throttle

The Obama administration has said it isn't interested in running an auto company, but with that big of a stake, some analysts say the government would probably be tempted to push its own policies on such issues as alternative fuel vehicles and unions. And that could affect the types of cars that roll off GM's assembly lines. Will GM Become 'Government Motors'? - ABC News

GM's proposal would give the government more than 50 percent of the automaker's stock in exchange for forgiving $10 billion in government loans. The United Auto Workers union would end up with a 39 percent stake.
Will GM soon stand for ‘Government Motors?’ - Autos- msnbc.com

[Wapasha]

Originally Posted by padcrasher

Oh so it was Obama and his minions that took his dealership away!.....ahaa!.....LOL

Yes. Maybe you need to inform yourself of what the heck is going on.

The 0bama administration's U.S. auto task force is responsible for the restructuring, which includes plant closing and this dealerships that are being forced out of business. More than 100 members from the National Automobile Dealers Association, who represent 20,000 new car dealers, are asking the 0bama administration's autos task force to reevaluate their planned reductions.

Washington -- The Obama administration's auto task force will meet with the National Automobile Dealers Association on Thursday -- the same day Chrysler is to announce it is closing at least 800 dealerships. Link (http://www.detnews.com/article/20090512/AUTO01/905120431/ - broken link)

[Wapasha]

Originally Posted by ovcatto

Are you actually trying to argue that based upon Chrysler's brilliant(sic) tack record as a company that the illogic of this decision (if the story is correct) couldn't possibly be emanating from Chrysler's management without any input from the government? If so, surely you jest.

0bama's auto task force is like a bull in a china shop, and yes, they are the ones driving all of this. 0bama's administration is is making the decisions for the restructuring of both Chrysler and GM. At the same time, he and his democrat pals are telling all auto manufacturers what kind of cars they are allowed to buy.

Between union demands and government unfunded mandates, all American auto manufacturing has been brought to this sorry state of affairs.

The government mandated smaller, more high mileage cars, and have doubled down on that this week. The best selling autos were SUVs, obviously they are what Americans wanted to buy. Is it any wonder the big three were losing money, the government mandated that they make putt-putt car with CAFE standards or face huge fines. so they made cars people did not want, just so they could sell SUVs.

I used to be a GM man and told my friends and family to try and buy American first, now I will buy foriegn made, unless Ford can survive and pull thru this mess.

[pghquest]

Originally Posted by mateo45

Nobody put a gun to Chrysler or GMC forcing them to accept government aid (or conditions). Simple fact of life, if you borrow money, there's likely gonna be "terms" from the lender (especially if you don't have a very good track record).

Ford was able to avoid borrowing, and seems to be managing it's affairs without any interference whatever. Chrysler & GM could be doing the same, except for their failures, and not the feds.

GM has more sales than Ford, they could have very easily borrowed from the public or raised funds by selling new stock, just like Ford did, two weeks ago..

Using your argument, I can rob a bank, hand it to someone else, tell them its stolen money, but they wont be to blame for spending the money because I didnt force them to take it by gun

[mateo45]

Originally Posted by pghquest

GM has more sales than Ford, they could have very easily borrowed from the public or raised funds by selling new stock, just like Ford did, two weeks ago..

Then why didn't they..... instead of going begging to the guvmint, knowing full well there would be "conditions"?

[Mod edit]

[vec101]

Originally Posted by delusianne

Bankruptcy is a communist invention?

I believe the poster meant communist in the sense of govt control of the company. Interesting piece released recently, was leaked by an unnamed source so it remains to be seen if it is true but....

Source says there will be a new car company in the US.
Guess who the owner will be?
The United States government.

This new company is to buy the healthy assets of GM (the "toxic" assets are to remain in bankruptcy).
The govt is not to remain the owner for long, details are not specific but the unions and stakeholders are to get a chunk of the pie.

Actions such as this are why people are shouting communism and socialism.

a new company initially owned by the U.S. government, a source familiar with the situation said on Tuesday. CORRECTED - UPDATE 1-GM bankruptcy plan eyes quick sale to gov't | Deals | Mergers & Acquisitions | Reuters

[mwruckman]

I find it funny that cars and trucks sold in Japan, Korea, and China already exceed the 35.5 mpg fleet standard. They have to its their law. Their engineers and managment make these cars and trucks. Even GM who builds cars and trucks in China with Chinese engineers and labor can meet these standards. What's wrong with American management , American engineers and US labor. The best thing would be to sell GM to an outfit like Shanghai Motors and make sure Chrystler has real FIAT (Italian) management. Then let the re-education of American labor and engineering begin. Make sure that no American MBA types get a chance to play financial games
rather than make good cars at a good price.

[Compression]

Originally Posted by mwruckman

I find it funny that cars and trucks sold in Japan, Korea, and China already exceed the 35.5 mpg fleet standard. They have to its their law. Their engineers and managment make these cars and trucks. Even GM who builds cars and trucks in China with Chinese engineers and labor can meet these standards. What's wrong with American management, American engineers and US labor. The best thing would be to sell GM to an outfit like Shanghai Motors and make sure Chrystler has real FIAT (Italian) management. Then let the re-education of American labor and engineering begin. Make sure that no American MBA types get a chance to play financial games
rather than make good cars at a good price.

One could argue that government "safety" and anti pollution mandates have been the root of this problem with the US manufacturers. Yes, they can come up with vehicles that compete in other countries when they are not fettered by US government mandates.

[burdell]

Originally Posted by ovcatto

I suggest that they look at their franchise agreement. If they are due compensation it should be in the contract, if not... that's capitalism.

And has nothing to do with Obama