Should the big 3 be bailed out?

[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.