Should the big 3 be bailed out?

[cjbcpa]

Don't forget the Marshall Plan. I think that a wee bit to do with their recovery ;-)

[Ccns23]

One good thing so far about the current crisis is that dealerships are closing. Why is that a good thing? Because we had way too many of them in some geographical areas. Out my way, you had 3 Dodge/Jeep/Chysler dealers within 10 miles of each other, 4 Cheverolet dealers, 4 Ford dealers, etc., etc. For comparison, there is only 1 Lexus dealer within 20 miles, 1 Acura Dealer, heck even the closest Porsche Dealer to me is about 20 or so miles away.

The US auto industry always seemed to be very aggressive on their sales forecasts for the year. Then, at the end of the year they are giving cars away. That's great for a consumer, but bad for the balance sheets. The dealership closings will help create a little bit of a demand for their vehicles since now consumers will have to put some effort into finding the one they want.

[emayer]

cjbcpa wrote:

Don't forget the Marshall Plan. I think that a wee bit to do with their recovery ;-)

No doubt! But keep in mind the plan wasn't a blank check to industry and wouldn't have worked in and of itself without the efforts of those willing to rebuild. Maybe a Marshall Plan analogue would be better suited now than simply throwing good money after bad....

[APXD 30]

cjbcpa wrote:

Don't forget the Marshall Plan. I think that a wee bit to do with their recovery ;-)

Or British Maj. Ivan Hirst the first CEO of VW. Hitler sold the dream but made Dr. Porsche build a weapons factory instead of an assembly line in Wolfsburg with German citizen's deposits.

The theft of the citizens' layaway funds was like a blank check.

[Brian Minkin]

The industry is aware that they have to many dealers to close together.

I know that Ford has been paying dealerships to close.  Sort of like severance.  They have been consolidating the Lincoln Mercury brand into Ford stores.  Ford also reduced the number of Volvo dealers in this area.

Chrysler I do not have details about but they have closed many dealerships in the last year. In doing so they are consolidating Chrysler, Dodge and Jeep into the dealerships that remain. 

GM is another story.  I have not seen any action on their part to close dealerships and the few rumors we have heard about them dropping dealers have not happened.  In this area the fallout for GM has been Cadillac dealers who just decided for various reasons to close their doors ( mostly family disputes where the part of the family not active in the dealerships wanted to sell the property...greed. Of note is that both properties still have not been sold.)  But this was not a GM decision.  I know of 2 Chevrolet dealers in this area that have closed and both are the dealerships financial situation and not pressure from GM. 

On another note GM said if they do not get bail out loans from the feds that they will have to hold back the payment of rebate and incentive money from its dealers.  If this happens I am sure we will see some fallout in the GM dealer ranks.  Maybe that is how the intend to lower their dealer numbers.

Honda and Nissan have also opened dealerships closer together then  most of the other imports.  Time will tell if they need to take the same steps but at this point both companies have a huge amount of unsold inventory sitting at the ports and storage lots as their dealers step on each other trying to make deals.

[Tony356993]

You know what the real question is here?  The Americans have built crap for the past fifty or so years.  Are we now to believe that an American can actually build a quality car?  What changed?  How about nothing!

A bailout will only prolong the suffering.  Time to pull the plug and get on with life.

Americans have already "voted" on the future of the big three by refusing to buy their shoddy wares. 

Chris is correct.