Political Party Considered in Closing Chrysler Dealerships? - Page 7 - Mercedes-Benz Forum

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post #61 of 73 (permalink) Old 05-31-2009, 04:16 AM
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i.e. if 90% of the dealers are republicans then how can you come close to an equitable distribution of of closings.

The thing that gets me though is your insistence that it is ok to close down profitable dealerships.

There must be something that we don't understand about the auto industry if it makes sense to close down a dealer who is making money, ergo they are buying vehicles from the manufacturer, therefore the manufacturer makes cars.

I mean unless the aim of the administration is to just hurt political enemies afterall. I mean 90% of the dealers are republicans...

Congrats on your first surrender and admitting you were wrong, now what about the other 2600 other threads you need to say you are sorry for........
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post #62 of 73 (permalink) Old 05-31-2009, 05:07 AM
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Congrats on your first surrender and admitting you were wrong, now what about the other 2600 other threads you need to say you are sorry for........
Go back and Look. I have admitted when I am wrong before on this forum. I guess that was when you were in self imposed exile for a few months.

Funny though, I don't remember that you have "me culpa'd" on anything. You must be perfect like McBear and FTL.

Who's John Galt.

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post #63 of 73 (permalink) Old 05-31-2009, 06:30 AM
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I am willing to capitulate that political party may not have played as much a factor in closing as I thought at first blush. i.e. if 90% of the dealers are republicans then how can you come close to an equitable distribution of of closings.

The thing that gets me though is your insistence that it is ok to close down profitable dealerships.

There must be something that we don't understand about the auto industry if it makes sense to close down a dealer who is making money, ergo they are buying vehicles from the manufacturer, therefore the manufacturer makes cars.

I mean unless the aim of the administration is to just hurt political enemies afterall. I mean 90% of the dealers are republicans...
Try this: The automobile company makes its profit by selling cars. If they calculate they can sell the same number of cars in a particular area with less dealerships, they'll make more profit because the operating costs of the closed dealerships are eliminated. Even if they lose some sales, as long as the incremental profit lost does not exceed the incremental cost of operating the additional dealership, they win.

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post #64 of 73 (permalink) Old 05-31-2009, 06:36 AM
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Try this: The automobile company makes its profit by selling cars. If they calculate they can sell the same number of cars in a particular area with less dealerships, they'll make more profit because the operating costs of the closed dealerships are eliminated. Even if they lose some sales, as long as the incremental profit lost does not exceed the incremental cost of operating the additional dealership, they win.
I agree, but is that what they are doing?

Not to mention that does not jive with the whole "we'll grow out of this" philosophy that has taken root in the Obama Administration.

How does creating unemployment in an area help that car company sell cars?

Who's John Galt.

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post #65 of 73 (permalink) Old 05-31-2009, 06:40 AM
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I agree, but is that what they are doing?

Not to mention that does not jive with the whole "we'll grow out of this" philosophy that has taken root in the Obama Administration.

How does creating unemployment in an area help that car company sell cars?
The unemployment they create is insignificant compared to the sales volume (ie - the sales and service workforce aren't buying many of the cars each year). And that is very likely exactly what they are doing, in addition to closing dealerships that are unprofitable.

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post #66 of 73 (permalink) Old 05-31-2009, 06:44 AM
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The unemployment they create is insignificant compared to the sales volume (ie - the sales and service workforce aren't buying many of the cars each year). And that is very likely exactly what they are doing, in addition to closing dealerships that are unprofitable.
And this is why Transparency is so important. Otherwise you end up with situations like this when Mack McClarty doesn't get the squeeze but others do.

Again though, penalizing a dealer who is profitable over another dealer who is profitable smacks of favoritism. This is why Government should not be in the business.

If selling cars at a profit is what keeps you business you want those who sell your cars to stay in business.

Who's John Galt.

"Timeo Danaos et dona ferentes" - Virgil, The Aeneid, Book 2

If the Arabs put down their weapons today, there would be no more violence. If the Jews put down their weapons today, there would be no more Israel. --Benjamin Netayahu
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post #67 of 73 (permalink) Old 05-31-2009, 06:48 AM
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And this is why Transparency is so important. Otherwise you end up with situations like this when Mack McClarty doesn't get the squeeze but others do.

Again though, penalizing a dealer who is profitable over another dealer who is profitable smacks of favoritism. This is why Government should not be in the business.

If selling cars at a profit is what keeps you business you want those who sell your cars to stay in business.
To the degree that it increases your profit . . . only . . .

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post #68 of 73 (permalink) Old 05-31-2009, 06:57 AM
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To the degree that it increases your profit . . . only . . .
Absolutely. But if a dealership is profitable they buy more cars to sell. It is kind of simple I should think. If the volume is not enough for the mother company to be profitable but the dealerships are, well that just does not make sense.

Who's John Galt.

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post #69 of 73 (permalink) Old 05-31-2009, 07:25 AM
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Absolutely. But if a dealership is profitable they buy more cars to sell. It is kind of simple I should think. If the volume is not enough for the mother company to be profitable but the dealerships are, well that just does not make sense.
It makes perfect sense. Try this again:


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Originally Posted by edfreeman View Post
Try this: The automobile company makes its profit by selling cars. If they calculate they can sell the same number of cars in a particular area with less dealerships, they'll make more profit because the operating costs of the closed dealerships are eliminated. Even if they lose some sales, as long as the incremental profit lost does not exceed the incremental cost of operating the additional dealership, they win.
You are stuck on the premise that the sales the dealership that is closing make will be lost. The car company expects that those customers will make their purchases at one of the remaining dealerships. If the total sales volume remains the same with less dealerships, they make more profit, period.

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post #70 of 73 (permalink) Old 05-31-2009, 07:27 AM
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It makes perfect sense. Try this again:




You are stuck on the premise that the sales the dealership that is closing make will be lost. The car company expects that those customers will make their purchases at one of the remaining dealerships. If the total sales volume remains the same with less dealerships, they make more profit, period.
I understand that and I am sure that is what they are thinking will happen. Economy of scale etc.

The problem is not the fact that they have too many dealerships. The problem is they make a product that people do not want.

Closing down dealerships that are profitable is like amputating a limb so you can conserve blood.

Who's John Galt.

"Timeo Danaos et dona ferentes" - Virgil, The Aeneid, Book 2

If the Arabs put down their weapons today, there would be no more violence. If the Jews put down their weapons today, there would be no more Israel. --Benjamin Netayahu
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