I don't get why Glenn Reynolds is picking on Chrysler, when the real villain/moron in the story is the Obama Administration. I understand Chrysler's attempts to stimulate sales on vehicles sitting at dealerships, including the soon-to-be-ex-dealers; Chrysler doesn't want to take the vehicles back. To be honest, the additional $1k is making me seriously consider buying a new Dodge Ram half-ton. I've owned two Dodge Dakota Quad Cabs ('00 and '04) and have found them to be well-designed and built, and trouble-free. Ford and GM also make great trucks, but I don't hesitate to recommend Dodge and to buy another one. However, if Chrysler goes under (fails to emerge from bankruptcy) then the value of any Chrysler product including a brand-new vehicle will drop significantly, and that is perhaps the main reason why I hesitate to buy. The blame for this will lie not with Chrysler, but with the Obama Administration and their botched handling of the bankruptcy. More specifically, the responsibility will be Obama's.
Although Chrysler's problems are not new, all of the automakers have suffered from the recession. People who are worried about whether or not they’ll have a job aren’t going to go out and buy a new car. What differentiates Chrysler is the FUD that has been spread by the Obama Administration and it's hardball approach to the Chrysler bankruptcy. Chrysler's sales have slumped more than the others due to concerns about the automaker's future viability. Throwing money, or Fiat, at the problem isn't going to fix it. Instead, the fix is to give Chrysler the same labor environment that successful US automakers (Toyota, Honda, BMW, VW) have, by breaking the UAW's stranglehold on the company. Of course, this one critical fundamental step is the one that Obama won't do due to his obligations to the unions.
What I don’t understand is, why is Chrysler shedding dealers? There is no ownership involved; dealers are independent businesses with a contractual agreement to buy Chrysler products and then support them. Automakers need dealers, because consumers won’t buy a car without a dealer to back the car up. Chrysler evidently thinks that their sales won't drop if they close these dealers. What they fail to understand is that the marginal cost of additional dealers is minimal. Dealers are truly the automakers' customers, so who cares if they buy 100 cars or 10,000? Each additional car sale is one that might not happen without that dealer.The economy will rebound, and it will be a lot harder to get new dealers than to keep the existing ones.
Can someone tell me how, if the desire was to kill Chrysler instead of saving it, would the Obama Administration's actions concerning Chrysler be any different?
Monday, May 18, 2009
Tuesday, May 05, 2009
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