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The Saga Of The Last Outpost Car Dealer

Some conservative blogs as well as NEWSMAX are kicking up a little dirt recently by claiming that Chrysler dealerships owned by Republican-leaning donors are somehow being shut down by the Obama Administration. And in a few cases, a loose example here or there has been used to perpetuate this story. However the facts emerging quickly blow the lid off this latest conservative urban myth that is currently circulating.dealership.jpg

It appears that the dealerships that Chrysler wants to survive are dealers whose property is large enough to house all three Chrysler product lines, Chrysler, Dodge and Jeep under one roof. And it is only smaller dealerships whose buildings or operations are too small to include all brands that are being forced out of business by Chrysler. Chrysler wants every dealer to be able to sell and service every Chrysler produced vehicle and some small dealers unable to meet this requirement are being asked to leave the Chrysler family.

Recently, some long-time single Chrysler product dealerships such as a Jeep dealership have begun running new ads announcing that they are now full Chrysler product line dealers. Some smaller dealers whose sales were relatively good are angry that they are not being included in Chrysler's new full dealership plans. However, these operations are simply too small to provide parts and service as well as the full Chrysler line.

These full service Chrysler dealerships have absolutely nothing to do with making partisan donations to the GOP. Yet the story is circulating that for example, Representative Vern Buchanan(R-FL), who owns a Chrysler dealership in Venice, Florida is on the cut-list. However, it is not always noted that he is also a Nissan dealer as well, and Buchanan can certainly continue in business to sell Nissan vehicles which are probably far better Sellers than most Chrysler vehicles right now. Many imported brands of cars have about a 60 day selling supply available at dealers compared to many Chrysler vehicles with far larger supplies of unsold vehicles. As I noted a couple of days ago, some Chrysler cars such as the Crossfire are in 300 day supplies at Chrysler dealers.

And in fact, Buchanan also claims, "I'll going to be fine", in an answer about what he'll do next. But likely that sure isn't going out of business. Buchanan will almost certainly continue as a successful Nissan dealer. Yet the conservative media conspiracy tales continue. Further, there is no way that the White House is involved in deciding how Chrysler restructures it's dealer network. That's an internal decision of Chrysler. There certainly isn't some Obama White House agency sitting around and looking to close down businesses whose owners might lean Republican. That's not the way that either business or the White House operates.

In fact, rather than simply being a full time Chrysler dealer, Buchanan actually operates 23 total car dealerships in Florida and North Carolina. So it becomes a complete myth that he is being forced out of business because with this much assets and an established franchise with Nissan, business will only continue for Buchanan. For a grocer, It would be like if Pepsi decided to cut a dealer for some reason, so he handles Coke products instead. It certainly isn't clear how Buchanan can claim the Obama White House has a single thing to do with this internal Chrysler dealer franchise determination issue, although that certainly hasn't stopped a few over on the right from making a conspiracy tale out of this issue.

So Chrysler decides to close about 25% of it's smallest and sometimes financially troubled dealerships among the 3,200 currently operating. And because some Florida Republican Congressman finds himself on the cut list because he's not even a full time Chrysler dealer, with commitments to selling Nissan vehicles, then the right runs with the conspiracy myths that Obama's killing off Republican businesses.

During the 1950's when Hudson and Nash merged into the newly formed American Motors Corporation some dealers no doubt were faced with the same choice, cease to become a Hudson or Nash dealer, and sell all the models produced by the American Motors Corporation or go out of business. But one Hudson dealer outside of Detroit, Miller Motors Hudson, decided to remain strictly as a Hudson dealer despite the fact that brand ceased to exist in the 1950's and continues to sell and service used Hudson cars to this day without the franchise support of a major existing car company. In a good year, this tiny little dealer might sell around 12 cars. Miller Motors might have even been able to join the Chrysler family after AMC was bought by Chrysler. But they didn't. They intended to be the last outpost for Hudson.

The fact of the matter is that Chrysler isn't looking to have some last outpost dealerships. They want full product line dealerships that modernize the company for survival sake. And the Obama Administration or White House has nothing to do with which dealerships that Chrysler chooses to continue or not. There is no politics here. This is strictly a business decision. It just doesn't do a dealer a lot of good to sulk and attempt to blame the Obama administration for attempts by Chrysler to financially survive. Unless dealers are large to become a full brand Chrysler product dealer, then they become an orphan like Miller Motors Hudson. The last outpost car dealer.


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Comments (13)

Allen:

It turns out that all car dealers are, in fact, overwhelmingly more likely to donate to Republicans than to Democrats -- not just those who are having their doors closed." In all, "88 percent of the contributions from car dealers went to Republican candidates and just 12 percent to Democratic candidates," while; the list of Chrysler dealerships being closed "gave 92 percent of their money to Republicans.

. It's hard to fling poo, when it runs out between your fingers, and I'll bet the republican oppo squad is starting to feel a little jaded: their shit seems to have down their arm. Republicans are almost as good at math as they are at history, science, economics, or the law. Aka. "Speculation in the echo chamber appears to be mounting..." Still no evidence, though.

Lee Ward:

The right wing echosphere is as bankrupt as Chrysler and GM, and all they've got to 'bail them out' is the drug-addled Rush Limbaugh and the Malkin-Coulter-Beck band of Limbaugh wannabees.

They're going under...

steve:

a lot of "In facts" in that post. I guess since thos one guy Buchanan will be ok that there's nothing to see here.
IN FACT 100% of the dealers closed down were republicans and 0% Obama donors.
It's racist.

Lee Ward:

Here's a reasoned argument posted by Volokh's Conspiracy:

Sean Parnell of the Center for Competitive Politics, who is well aware that public disclosure of campaign contributions can bring political repercussions, thinks the charges in this case "are almost certainly not true." He writes:

While things may have changed somewhat since the days I was raising money for a Republican member of Congress, auto dealers are almost overwhelmingly Republican. Pretty much by definition, if you're going to be closing down auto dealerships, you're going to be closing down an awful lot of Republican-owned auto dealerships. A quick look at the giving by the National Auto Dealers Association PAC consistently shows contributions going to Republican candidates by about a 2 to 1 margin, and nearly 3 to 1 in one recent cycle.

More telling, however, is the fate of minority-owned auto dealers under the closings. If the Obama administration were targeting political opponents for closure, it would seem likely that political allies, or at least those the Obama administration presumably favors, would have a lower closure rate than others.

It's speculation on my part, but I'm going to go out on a limb here and say that minority-owned dealerships would come out better-than-expected if the Obama administration were using auto dealership closures as a tool of political revenge.

So what do the numbers show? From an article in the Seattle Medium:

Of the 789 Chrysler dealers who were notified that their contracts will not be renewed, 38 are minority owned...

At the end of April, there were 154 minority dealers in Chrysler's 3,181 total U.S. dealer body network . . .

According to my trusty calculator, before closings 4.84% of Chrysler's dealers were minority owned. What percentage of auto dealers receiving closure notices are minority owned? 4.82%

At this point, the case for Obama's use of campaign disclosure reports to compile an "enemies list" for use in the closure of auto dealerships pretty much falls apart, unless someone wants to really make a big deal of the two one-hundredths of a percent where minority-owned dealerships come out ahead.

and another reasoned argument from Media Matters:

One of the questions I get asked most often as I do interviews about my new book, Bloggers on the Bus: How the Internet Changed Politics and the Press, is why is it that conservatives trail so far behind liberals when it comes to building their side of the blogosphere into something important and influential. The simple answer is that so many right-wing bloggers aren't serious people and the nonsense they blog about revolves around loopy conspiracy theories that, aside for providing comic relief, aren't really good for anything.

Which bring me to the budding Obama scandal that's been hatched this week within the right-wing blogosphere, and which has all the hallmarks of previous failed Obama conspiracy theories that bloggers excitedly chased. The latest to be embraced is the idea that the Obama White House, as part of the restructuring that the auto maker has been forced to undergo, personally selected which Chrysler dealership would be closed. Not only that, but the Obama White House punished dealerships whose owners who gave campaign contributions to Republicans.

It's just like Nixon's Enemies' List!

Go here if you want to read the pained analysis, where bloggers excitedly claim that their research proves a massive conspiracy's afoot. What is the research? It's a laundry list of name of dealers who have indeed given money to the GOP and have indeed been closed down as part of the GM restructuring. So why doesn't that prove Obama has a hit list? First, because nearly 800 dealerships are being closed down, yet bloggers only detail campaign contributions for less than 10 percent of those dealership owners.

Second, all the bloggers actually prove is that lot of dealership owners are Republicans. Does that surprise anyone?

So rather than uncovering massive White House conspiracy to throw thousands of auto industry workers of work simply as a way to "punish" GOP donors, all the bloggers have proven--I'm repeating myself, I know--is that car dealership owners tend to write checks to Republicans. And all this time I had thought of dealerships as a bastion of progressive politics.

The only way GOP bloggers could get this whole soggy mess off the ground is if they can prove, definitively, that Chrysler dealers who survived the cut were all massive, across-the-board, Democratic donors. But bloggers don't and I suspect they cannot because local car dealership owners tend to give lots of money to Republicans.

ke_future:

let's see, take the way that the adminstration has been acting in the whole TARP, GM, and Chrysler deals. then add in that the way the dealers have been chosen to be closed is opaque. then throw in the fact that some very profitable dealerships (who are big GOP backers) are on the list. and how some questionable dealerships (DEM backers) are not on the list. put all that together, and it's not unreasonable to question what is going on.

the administration could clear this all up by publishing the criteria used to decide which dealerships were closed. and then see if the list and the criteria match.

personally, i don't think there's any "there" there, but there is enough questions the warrant at least looking into it. there is nothing wrong with holding our government accountable and ensuring that it's processes are open whenever possible. right?

Lee Ward:

My understanding is that the administration didn't decide which dealerships closed -- I thought decision was made by Chrysler management.

Chrysler, which has been working to reduce the size of its dealer network for several years, is focusing on putting its three brands under one roof, rather than having standalone Dodge, Chrysler or Jeep franchises.

Sounds like it's Chrysler making the decision, not the administration.

Hey ke_, - what evidence do you have that the administration made the decision, and not Chrysler management? Please post a link. I know you're not just making that up...

Lee Ward:

The nation's largerst Auto dealer (AutoNation) which is facing closure of several GM and Chrysler dealerships that it owns says the closure process is fair.

Fort Lauderdale-based AutoNation, the nation's largest auto retailer, has six GM franchises and seven Chrysler franchises on the automakers' closure lists.

While the company and its executives have traditionally donated Republican, company spokesman Marc Cannon said he does not believe the dealership closings are politically motivated.

"GM had criteria, and told everyone in the world what it was. We lost three or four dealerships that we expected, and one that was marginal. It was a fair process," Cannon said. "Chrysler is a little different. Its strategy is not as clearly defined. We don't think Chrysler went in there and picked on dealers based on party affiliation. I would say car dealers are overwhelmingly Republican across the country, so that's what you would expect."

But ke will post a link showing that the administration is involved in the decision-making on the dealership closures, and we can look at that further, right ke_future?

ke_future:
A lawyer representing a group of Chrysler dealers who are on the hit list deposed senior Chrysler executives and later told Reuters that he believes the closings have been forced on the company by the White House.

"It became clear to us that Chrysler does not see the wisdom of terminating 25 percent of its dealers. It really wasn't Chrysler's decision. They are under enormous pressure from the President's automotive task force," said attorney Leonard Bellavia

from this article:
http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/Furor-grows-over-partisan-car-dealer-closings-46261447.html

and before you hyperventilate, lee, no there isn't any hard evidence, just the impressions of somebody involved in the process.

it's an interesting article that explores both the conspiracy part as well as the reasons why there is no "there" there.

like i said, lee, i just want the process to be open. if it was, there wouldn't be all these questions. afterall, in the quote you provided (where is your link?) the AutoNation folks say that the Chrysler process is not clearly defined.

you may trust obama. i don't. he's never given any reason for me to trust him. and he's given several why i shouldn't

Lee Ward:

"and before you hyperventilate, lee, no there isn't any hard evidence, just the impressions of somebody involved in the process."

Impressions that inspired you to make a definitive call for "the administration could clear this all up by publishing the criteria used to decide which dealerships were closed. and then see if the list and the criteria match."

And let's look at the quote you provided to back that up:

It became clear to us that Chrysler does not see the wisdom of terminating 25 percent of its dealers. It really wasn't Chrysler's decision.

The administration may indeed have pressured Chrysler to close dealership sand streamline its retail pipelines. Maybe, maybe not, but yes... maybe administration officials encouraged Chrysler to reduce the number of dealerships.

But the evidence you now cite as support for your claim says nothing about the administration being involved in the selection of which dealerships are closed.

So, going back to your previous comment where you stated: "the administration could clear this all up by publishing the criteria used to decide which dealerships were closed. and then see if the list and the criteria match."

You now admit that you have no evidence whatsoever that the administration has had a hand in the selection of whihc dealerships are closed, right?

Your call for the administration to "publish the criteria used" promotes a lie you can't support -- that the administration was involved in the selection process.

ke_future:

that quote was not the only reason, lee. it's just one of them.

look, even you have to admit that the obama administration has been involved with the high level decisions at chrysler as they're trying to get this whole bankruptcy deal done. if obama can fire the ceo and then appoint the new one, don't you think that he (or his administration) can publish or force to be published the criteria? let's not kid ourselves about who is in charge of this fiasco.

Allen:

Ke_future, how did this whole fiasco start? Banks to big to fail, were failing, housing boom going bust, auto industry going belly up, etc, etc. IMO, this started back before Clinton. And yes, Clinton helped it along, and under Bush, it finally went to pieces.

And who does the GOP blame. Simple it's unions fault. Show me real proof that any union wanted a company to fail. They haven't. They want the company to succeed,because it's in their best interest to have a decent paying job, with benefits.

Has the notion that maybe the top 1% of this country got more greedy than they already were? And they caused the economic mess we are now in. Why didn't President Bush let the too big to fail banks fail?

ke_future:

i don't think it was entirely the unions fault. nor do i think that unions wanted the companies to fail. i have said neither. i agree with you that it is in the unions best interest for companies to succeed. i think we may disagree on what it takes for those companies to succeed. but that is a different discussion.

unions have 2 agendas: help their members, and increase their power. sometimes unions push for choices which are good for them and their members in the short term. but they don't think about what the long term impacts are. and sometimes i think they ignore them.

management does the same thing. and government rules changes in compensation in the 90's help that trend toward short sightedness along.

i'm not letting anyone off the hook on this. workers, owners, investors, or government. they all had a role to play. there were are no heroes, and everyone is a villain.

i wish bush had allowd the banks that were too big to fail to fail. i've been very consistant in saying that. i think it would have hurt, a lot, in the short term. but i also think it would have allowed a more healthy banking and business environment to emerge from the wreckage.

but none of this really goes to what this thread has been about. this thread is about the chrysler dealerships and the closure of some of them. not about who's to blame for the current economic problems.

which brings me to the point i have been making. nobody knows the criteria of the termination of dealership deals nor if the actual termination list matches up to that criteria. and given the way that obama has operated in the government/business interactions that it is legitamit to question what is going on.

Christina Viering:

Interesting hypothesis.


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Publisher: Kevin Aylward

Editors: Lee Ward, Larkin, Paul S Hooson, and Steve Crickmore

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