GM Offers to Renew 661 Dealers
[Guest post by DRJ]
Prior to its bankruptcy, the Obama Administration pressured GM officials to make “faster and deeper cuts” in closing over 2,000 of its franchise dealers. However, Congress established an arbitration process to review the terminations after a “firestorm” erupted over the dealer closures.
Approximately 1,100 dealers met the deadline to file for arbitration and, having reviewed the initial filings, GM is offering to renew 661 dealers:
“In May, as the Detroit giant worked its way through bankruptcy, GM notified 2,000 dealers that they would lose their franchise license in October 2010. But Congress demanded that the company give dealers an appeal process, and 1,100 of those targeted for shutdown met last month’s deadline to file for arbitration in an attempt to regain their license.
The arbitration hearings will take place over the next three months, but GM’s initial review of the applications convinced it to go ahead and offer more than 600 dealers their franchise back, the company said. Those affected have been sent a “letter of intent” and will be allowed to resume normal operations if they comply with the letter’s terms.”
Auto dealer groups claim the GM and Chrysler terminations cost as many as 169,000 workers their jobs. Reinstating these dealers means some of those jobs will come back, although almost a year later.
Who says government is inefficient?
— DRJ
More interesting is to see what states the dealerships come back in. Will they be Democrat states? Will they be states with areas that were represented by a not-so-certain-yes-vote for health care?
Metallica (bb58d8) — 3/6/2010 @ 5:27 amThe dealers’ political contributions would also be interesting. Most car dealers, like most small businessmen, are Republicans. I still do not understand how it helps to sell your product by putting out of business the people who sell it.
Maybe Paul Krugman knows but you would have to check to see if what he says is in the Times or in his textbook. They don’t agree.
Mike K (addb13) — 3/6/2010 @ 5:40 amCongress demanded that the company give dealers an appeal process
I’m no businessman, but even I know that is pretty scary when Congress is micromanaging business decisions. Big Brother is watching you.
MD in Philly (70a1ba) — 3/6/2010 @ 6:04 amhttp://www.youtube.com/watch?v=mbeK_6mckM8&feature=related
UAW isn’t going to like this one. Most of those dealerships supported Republican values.
PatriotRider (1729de) — 3/6/2010 @ 6:26 amHave you heard/read/know if this is true?
http://jdlong.wordpress.com/2009/05/15/pres-barack-obama-editor-of-the-harvard-law-review-has-no-law-license/
If so, does it mean anything?
Lynn (4e0dda) — 3/6/2010 @ 7:18 amI’m not really sure where the blame lies:
With GM management who took advantage of the situation to ditch dealers but did a bad job of making the list? (I don’t think there’s any argument that GM had too many dealers and that some selective pruning would have yielded benefits).
Or did GM make good choices (yes, GM making good decisions doesn’t happen often), only to be overruled by the government review board, forcing GM to ditch more dealers than they should have? And only now has GM been able to convince the government to yield and allow GM to bring dealers back in?
Or did GM and the review board do a good job in pruning dealers but then Congress got involved and set up a review process that was so screwed up that GM realized they’d be better off rescinding notices than fighting and losing the claims in arbitration?
Or – as I think might be the case – the right decision was to cut the number they did, only to have new boneheaded GM management come in and want to add dealers in a misguided attempt to save the company through added market share as opposed to saving the company by making money on a smaller share of the overall pie? And I say boneheaded because GM has always screwed up trying to grow their way to profitability.
steve sturm (116925) — 3/6/2010 @ 7:38 amIf I have a company that makes widgets, why would I want fewer widget dealers ? I don’t want to subsidize them but wholesale pricing goes back to the beginning of retail trade. GMAC, for example, did fine until it got into sub-prime real estate financing.
Mike K (addb13) — 3/6/2010 @ 7:42 amThis is the latest in a series of Obama miscues that come back to bite him on the butt.
FatBaldnSassy (cc3778) — 3/6/2010 @ 7:47 amDon’t misunderestimate Big Ed Whitacre.
GeneralMalaise (04e9c2) — 3/6/2010 @ 8:18 amNever mind!
/Emily Litella
Lazarus Long (a4f63e) — 3/6/2010 @ 8:20 amFor what it’s worth, the only Chevy dealership in the county was hit by the closure. That leave our county with zero GM dealerships, with the nearest possible source about 100 miles from the population center. (Probably a demographic of 150,000+ people with other counties and draw from northern California.) Way to go, folks.
The Chrysler dealership kept its franchise, but the word came out that they had supported the DNC quite a bit. Didn’t do them any favors. As it happens, the other brand the Chrysler dealership sells is Toyota, so Schadenfreude ain’t just for dinner.
Red County Pete (744a48) — 3/6/2010 @ 8:20 am“Maybe Paul Krugman knows but you would have to check to see if what he says is in the Times or in his textbook. They don’t agree.”
Read that, Mike K… rat chingado Krugman is nothing if not consistently inconsistent.
GeneralMalaise (04e9c2) — 3/6/2010 @ 8:33 am“If so, does it mean anything?”
I don’t think there’s ever been someone who was editor of HLR that was licensed to practice law as editor. As to what it means, it means the Obamas don’t practice law and don’t pay any bar fees or any of the requirements that lawyers have.
But I’m sure someone can go on a wingnut tangent on this if they want.
imdw (bb4edc) — 3/6/2010 @ 8:33 amIt’s 8:34 AM… do you know where your moonbat is?
GeneralMalaise (04e9c2) — 3/6/2010 @ 8:34 amObama was never a “law professor”, either. He was a guest lecturer. He never published anything, other than TWO autobiographies, which, admittedly, takes some stones (or is just another manifestation of a severe case of narcissism) when one has accomplished little, if anything.
GeneralMalaise (04e9c2) — 3/6/2010 @ 8:42 amThe analysis on which dealers were hit was made some time ago and I’m sure it’s still out on some website out there. The final answer was:
“If you were cutting dealers based on sales or making/losing money for GM, this was not how to do it. If you were cutting dealers with some combination of sales, making/losing money for GM, and coverage of geographical areas, this is not how you would do it.
If you were cutting dealers based on political ties and who has friends in high places and personal relationships (most of which had to do with in-company political relationships more than Democrat/Republican, although there was some mapping) this is how you would do it.”
luagha (40d851) — 3/6/2010 @ 8:55 amThe theory on cutting dealers is
steve sturm (116925) — 3/6/2010 @ 9:14 am* – overall volume won’t go down as customers shift to surviving dealers (of course, presumes a surviving dealer close enough),
* – that the surviving dealers will make more money as a result of having less same-brand competition, leading these dealers to be able to need less price and advertising support from the manufacturer,
* – the cut dealers were actually hurting GM profits as GM was spending more to support them than they were producing in car and service sales, and
* – if GM was cutting back production and giving up volume to boost profits, they wanted to make sure their strongest dealers got the production.
I’m not necessarily agreeing with the specifics of what GM did, but it is mistake to conclude that it is always a good thing to have more dealers.
Steve, it depends on the amount of subsidy. Let’s say you decide to allot subsidy on the basis of sales. The dealers with poor sales volume are on their own. Doesn’t that sound better than checking their political contributions ? My understanding that some of the decisions were based on that criterion. Not many because few independent businessmen supported Obama.
Mike K (addb13) — 3/6/2010 @ 11:06 amIt will be interesting to see if any of these dealers tell GM to stick it. My guess is that many of them already have other deals with other manufacturers in place or have revamped their businesses and don’t want to rely on GM any longer. I am not in the car business but I have to believe that Honda, etc looked at who got cut and contacted the more attractive dealers if they were not going to jeopardize an existing franchisee. I may be wrong but I hope that info comes out.
BT (74cbec) — 3/6/2010 @ 11:44 am\
I have dealers? 🙂
GM Roper (6afe02) — 3/6/2010 @ 2:12 pmComment by Lynn — 3/6/2010 @ 7:18 am
The research point should be:
AD - RtR/OS! (9dbe33) — 3/6/2010 @ 3:34 pmDid Barack Hussein Obama ever pass the IL Bar Exam;
Did he join the IL Bar; and,
What are the inclusive dates of his membership?
We know that he represented himself as a lawyer during his ACORN days, the question is was he licensed to practice law at the time?
But, back to the sugject at hand…
AD - RtR/OS! (9dbe33) — 3/6/2010 @ 3:43 pmGM had too many dealerships and would have winnowed them before if not for the various State’s franchise laws.
They also have too many plants, restricted by too many work rules; but, it might be too late for that to change – they really needed an unencumbered BK process, which they were prevented from doing by the politics of the whole thing.
Now, with 80% or more of the company in the hands of the Feds or the UAW, there is no way that GM can ever be returned to the land of “private enterprise”.
“The research point should be:”
You know he was a member of the bar, that practiced in a law firm, right?
imdw (688568) — 3/6/2010 @ 3:47 pmMany law school graduates join law firms before they are licensed.
DRJ (daa62a) — 3/6/2010 @ 3:49 pmPlus, I thought Barack Obama was a summer associate at Sidley & Austin. I didn’t realize he practiced there.
DRJ (daa62a) — 3/6/2010 @ 4:00 pmIf we were to know the results of Obowman’s Bar Exam, it would be the first instance of public knowledge of an academic achievment of his since leaving High School.
Nothing else is out there in the public record:
Not his classes or grades at Pepperdine;
Not his classes or grades at Columbia;
Not his classes or grades at Harvard Law.
Nothing!
And no-one in the MSM seems to care….
AD - RtR/OS! (9dbe33) — 3/6/2010 @ 4:10 pmit is the strangest thing.
Mike K: in the perverse world of auto franchise laws, GM might not have been able to treat different dealers in a state differently from one another… shutting the bad ones down may have been their only option.
steve sturm (116925) — 3/6/2010 @ 4:13 pm“Plus, I thought Barack Obama was a summer associate at Sidley & Austin. I didn’t realize he practiced there.”
Obama was an associate at Davis, Miner, Barnhill & Gallard for several years. Then later held an of counsel position there for even more years.
But AD shouldn’t let these simple biographical facts from stopping his research.
imdw (533406) — 3/7/2010 @ 1:54 pmThanks for pointing that out, imdw. From the LA Times:
Practicing law was not his goal because in those days, young associates in top law firms were required to generate 2000 (or more) billable hours a year, not a decade.
DRJ (daa62a) — 3/7/2010 @ 2:07 pmI’ve heard of those hours at Biglaw recently, but not in the 90’s in a small firm in Chicago. What makes you say this was the standard?
[note: fished from spam filter. –Stashiu]
imdw (8222e7) — 3/7/2010 @ 2:12 pmBecause I was an associate at a law firm in the 1980s and I know what we had to work.
DRJ (daa62a) — 3/7/2010 @ 2:14 pmThis wasn’t just any small Chicago firm, it was a civil rights firm. They are true believers in their cause.
DRJ (daa62a) — 3/7/2010 @ 2:15 pm“Because I was an associate at a law firm in the 1980s and I know what we had to work.”
Wow that makes that drivel you posted about the DOJ lawyers even more ridiculous.
“This wasn’t just any small Chicago firm, it was a civil rights firm. They are true believers in their cause.”
I read “civil rights firm” as meaning plaintiff’s work, not kumbayah and marches to Alabama. Maybe true believers don’t have clients that can pay the bills.
imdw (c5488f) — 3/7/2010 @ 3:10 pmimdw, 3700 billable hours is about 90% of the minimum billing quota for two years at a real law firm.
That’s DRJ’s point.
Not that you’ve ever paid attention.
SPQR (26be8b) — 3/7/2010 @ 3:13 pmI post so much drivel, imdw. What are you referring to?
DRJ (daa62a) — 3/7/2010 @ 3:16 pmThen one of us doesn’t understand what a civil rights firm is.
DRJ (daa62a) — 3/7/2010 @ 3:18 pm“I post so much drivel, imdw. What are you referring to?”
The bit about the DOJ lawyers that had worked on the detainee cases. Not your recent Mirengoff post.
“Then one of us doesn’t understand what a civil rights firm is.”
Or how they pay the bills.
[note: fished from spam filter. –Stashiu]
imdw (2d82e7) — 3/7/2010 @ 4:07 pmI assume that by plaintiffs’ work you mean when law firms work on commission, and that’s probably true. But, to me, “plaintiffs’ work” refers to representing plaintiffs in tort cases — car wrecks, etc. — and that is not the typical work of a civil rights law firm. In the early days, tort cases were taken to pay the bills so the firm could afford to handle civil rights cases. More recently (since 1976), civil rights legislation authorizes awards of attorneys’ fees to successful litigants.
DRJ (daa62a) — 3/7/2010 @ 5:22 pmimdw, it must be said: You have an extraordinary lack of self-awareness.
Dana (1e5ad4) — 3/7/2010 @ 5:29 pmI mean that they’re firms that represent plaintiffs in civil rights litigation looking for damages and fee awards, similar to how there are firms that focus on other forms of contingency or fee-shifting litigation, such as med malpractice, or other torts.
imdw (688568) — 3/7/2010 @ 5:31 pmOne would think so but the LA Times’ article indicates Obama’s legal efforts were focused on a fired securities trader, landlords and property developers like partner Allison Davis. Those aren’t typical civil rights plaintiffs.
DRJ (daa62a) — 3/7/2010 @ 5:45 pm“Those aren’t typical civil rights plaintiffs.”
What are ‘typical civil rights plaintiffs’?
imdw (017d51) — 3/7/2010 @ 5:58 pmTrolling comedy.
SPQR (26be8b) — 3/7/2010 @ 6:03 pmThough you said he ‘focused’ on those matters, per hte article. The article listed those 3 but said 70% of his work was ‘voting rights, civil rights and employment.’ And the rest ‘on matters related to real estate transactions, filing incorporation papers and defending clients against minor lawsuits.’ It seems like 2 of your 3 ‘focus’ types were in the latter category.
imdw (017d51) — 3/7/2010 @ 6:04 pmI don’t know what his caseload was but the article lists cases that touch on each of the 3 areas you describe:
Voting rights = motor voter case he filed, so he probably spent most of his time on this unless he was a figurehead.
Employment = representing a fired securities trader.
Civil rights = representing landlords and property developers in low-incoming housing disputes.
DRJ (daa62a) — 3/7/2010 @ 6:18 pmIn the 1970s-1990s, typical civil rights plaintiffs were individuals asserting claims under the Civil Rights Act.
DRJ (daa62a) — 3/7/2010 @ 6:20 pmDRJ – your tolerance and patience is astounding, especially when you know you are addressing an intentionally mendoucheous ‘tard.
JD (03a313) — 3/7/2010 @ 6:24 pmI’m female. I like to talk.
DRJ (daa62a) — 3/7/2010 @ 6:26 pmI’m still in awe that imdw thinks that only “Biglaw” had billing requirements in the ’90’s.
SPQR (26be8b) — 3/7/2010 @ 6:28 pm“I’m female. I like to talk.”
ROFLMAO
SPQR (26be8b) — 3/7/2010 @ 6:33 pm