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I'm pretty sure that Chrysler isn't going to try to get out of bankruptcy by politically motivated dealership closings rather than economically optimal dealership closings.

Tinfoil hat brigade, awaaaaaaaay!

For 789 dealerships, you wouldn't use a t test.

Do the GM closings fit this pattern ?

(playing along with the latest right-wing absurdity)

Hank Rearden wrote:

Tallgeese wrote:

For 789 dealerships, you wouldn't use a t test.

Well, it would be one approach if you split them into two groups (open and closed) and did a mean and standard error of GOP contributions (or Donkey contributions) for both. Null hypothesis = there is no difference in mean campaign contribution between the two groups.

A t distribution is for small sample sizes. Doing a mean and variance comparison for the dealerships you'd use normal distribution.

Farmerkev wrote:

The thing that gives this enough weight to warrant investigation is things like the dealer that sold 700 cars last year getting closed.
That's the ones you want to stay open.
If there isn't political motivation behind it then it's just plain incompetence that must be stopped.

By whom? Not the gubmint, surely?

Farmerkev wrote:

The thing that gives this enough weight to warrant investigation is things like the dealer that sold 700 cars last year getting closed.
That's the ones you want to stay open.
If there isn't political motivation behind it then it's just plain incompetence that must be stopped.

Not if that 700 car dealer is located 1/4 mile from a 1000 car dealer and cutting into their profits.
The problem here is dealers competing with each other and driving the profit on the brand down.

6. How does cutting dealers actually help your bottom line in bankruptcy?
Our goal is to create a stronger, more profitable dealership network going
forward with dealerships offering our full line portfolio of Dodge, Jeep and
Chrysler products for customers.  Our current dealer network is highly stressed
with too many dealers carrying costs spread over too few sales.  Fewer, larger
dealers are more viable and profitable and as a result have the ability to better
satisfy customers.  In addition, our future product offerings will increasingly be
calibrated to dealers selling all brands (CJD) from a single integrated location.

source

Look, if you want to read the bankruptcy filing, it's here. All 62 megabytes of it. And 700 cars is below average.

Last edited by jerwin (2009-05-29 7:57 am)

Farmerkev wrote:

Chrysler and GM's problems aren't because they have too many free salesmen.
Use your brain and think.

So let me get this straight:  These guys are simply operating under the misconception that having "too many" dealerships is a bad thing?  Because you're certain that it isn't?

Have you picked up the phone and let someone know about this?  It sounds serious.

bratboy wrote:

Farmerkev wrote:

Chrysler and GM's problems aren't because they have too many free salesmen.
Use your brain and think.

So let me get this straight:  These guys are simply operating under the misconception that having "too many" dealerships is a bad thing?  Because you're certain that it isn't?

Have you picked up the phone and let someone know about this?  It sounds serious.

You're correct of course.
How foolish of me.
Walmart went broke putting company owned stores in every town in America.
McDonalds was another big wipeout, hell they would have stores every few blocks in some places plus every exit on every interstate in across the country.
The business world is rife will examples of too many places for people to buy your product being a bad idea, especially when they pay you for the privilege to do so.

So, between 88% and 92% of all Chrysler dealers are Republicans.  Of course the vast majority of the closed ones will be Republican; the vast majority of all of them are Republican!

One view:

Dealers have themselves been warning Detroit's automakers for decades that they were adding too many stores. In repeated lawsuits, dealers tried to block new stores, arguing there were already too many and adding more would hurt business.

Unfortunately, Detroit's automakers believed so strongly that more dealers would equal more sales -- a misguided concept they've since abandoned -- that they often fought their existing dealers in court.

A few years ago, for example, four GMC dealerships sued to stop GM from adding more franchises in Chicago. It took the Supreme Court of Illinois to block the effort. "There are a total of 27 GMC dealerships in the Chicago area," the court observed.

In comparison:

Last year, GM and Chrysler dealers, which have more than 22,000 brand franchises combined into about 9,500 dealerships, sold about 199 vehicles per franchise.

By contrast, Toyota, which has been growing sales with just 1,461 dealership franchises in the United States, sold an average of 1,518 vehicles per store.

That means the average Toyota franchise sold nearly eight times as many vehicles as the average GM or Chrysler dealer.

Consequently, Toyota dealers had a lot more money to spend on advertising, upgrading facilities and customer service, like free coffee and rental cars.

Detroit's overloaded network of dealership has excess administrative costs, too.

There's a lot of debate about how to calculate these. But Detroit's automakers spend billions delivering vehicles to stores and offering a variety of administrative services, such as marketing assistance, training, parts-and-service support, auditing and other behind-the-scenes activities, such as basic communications.

Link.

Last edited by bratboy (2009-05-29 8:20 am)