Legislation for Auto Dealer Rights is a Hollow Victory for Many
Congress came up with new language for proposed legislation to establish binding arbitration for ex-dealers for Chrysler and General Motors who want their franchises back.
The new proposal won the endorsement of the National Automobile Dealers Association and the so-called "dealer rights" legislation looks like it will become law.
However, it's obvious that it's too late for reinstatement, for many dealers who lost their franchises in the automakers' bankruptcy restructuring. Chrysler terminated 789 dealers last summer. GM put about 2,600 dealerships on notice they will be closed in the fall of 2010, and stopped shipping them new cars and trucks.
Many of the terminated dealers were financially crippled after only a couple of months out of the new-car business, plus the costs associated with winding down their original franchises.
Even if their franchises were handed back to them, many ex-dealers couldn't afford to go back into business, said Charles W. Pompey, whose family owned Pompey Dodge in Kingston, Pa. for 43 years, until Chrysler terminated the dealership in June.
"At this point, I don't even want my franchise back. I can't afford to risk my financial future with Chrysler again, like my family did before," he said in a phone interview today. He said Pompey Dodge was profitable when Chrysler closed it, which in his view makes the closing hard to justify.
"What would help me would be some financial restitution," he said, but according to Pompey, so far the proposed legislation looks as if reinstatement is the only potential recourse.
"The comparison is, it's as if somebody broke into your house and then they call you and say, 'We have all your stuff, you want to buy it back?' It just doesn't work that way. They took everything I would use to buy it back," Pompey said.
He said he can fall back on a separate body shop and collision-repair business, but he knows other dealers who have had to sell their houses, or declare bankruptcy. That means it's unlikely they could meet Chrysler's financial requirements for new-car dealers.
"There may be a small, select few who could get their franchises back, and I hope they do, I don't wish ill-will on anybody," Pompey said.
http://www.cbsnews.com/8301-505123_162-42940915/legislation-for-auto-dealer-rights-is-a-hollow-victory-for-many/
The new proposal won the endorsement of the National Automobile Dealers Association and the so-called "dealer rights" legislation looks like it will become law.However, it's obvious that it's too late for reinstatement, for many dealers who lost their franchises in the automakers' bankruptcy restructuring. Chrysler terminated 789 dealers last summer. GM put about 2,600 dealerships on notice they will be closed in the fall of 2010, and stopped shipping them new cars and trucks.
Many of the terminated dealers were financially crippled after only a couple of months out of the new-car business, plus the costs associated with winding down their original franchises.
Even if their franchises were handed back to them, many ex-dealers couldn't afford to go back into business, said Charles W. Pompey, whose family owned Pompey Dodge in Kingston, Pa. for 43 years, until Chrysler terminated the dealership in June.
"At this point, I don't even want my franchise back. I can't afford to risk my financial future with Chrysler again, like my family did before," he said in a phone interview today. He said Pompey Dodge was profitable when Chrysler closed it, which in his view makes the closing hard to justify.
"What would help me would be some financial restitution," he said, but according to Pompey, so far the proposed legislation looks as if reinstatement is the only potential recourse.
"The comparison is, it's as if somebody broke into your house and then they call you and say, 'We have all your stuff, you want to buy it back?' It just doesn't work that way. They took everything I would use to buy it back," Pompey said.
He said he can fall back on a separate body shop and collision-repair business, but he knows other dealers who have had to sell their houses, or declare bankruptcy. That means it's unlikely they could meet Chrysler's financial requirements for new-car dealers.
"There may be a small, select few who could get their franchises back, and I hope they do, I don't wish ill-will on anybody," Pompey said.
http://www.cbsnews.com/8301-505123_162-42940915/legislation-for-auto-dealer-rights-is-a-hollow-victory-for-many/
It was not the fault of President Obama.
ReplyDeleteIt was Chrysler who decided to close Pompey Dodge. Here are some questions.
Why would a car company, Chrysler, close a successful single point dealership to move that same franchise to a multi-point dealership location across the river in Wilkes Barre?
Does this make sense to you?
Does Chrysler think they will sell more Dodges by putting the Kingston point with ll other new car models?
There were slimy underhanded politics going on between Chrysler and Motor World. There are other issues involved here and none to do with proper business.
The dealer principal of the Kingston Store was not popular with the folks at the Chrysler Corporate level. Lastly how does a corporation think it will sell more models with fewer stores? It is not like the corporation supplies funds to the stores to survive. The stores survive strictly on private capital and business practice. Kingston Dodge,(Pompey Dodge later) was there since 1966 and rebuilt after the flood of 1972.
It is an injustice that so many talented and loyal employees lost their job in Kingston. Many been there since the seventies.
There is more to the story but it would take many more pages to spell it all out. Read between the lines.
Put the blame where it belongs and that is not on the President Obama.
How do I know these facts. Let's just say I was once an insider to both Kingston Dodge and Chrysler.
By EMILY MALTBY And ANGUS LOTEN
DeleteU.S. government bailouts of General Motors and Chrysler became a constitutional battleground when they were pushed through bankruptcy court in 2009.
Turns out the battle isn't over just yet.
More than 220 former car dealers are pressing their case that the Obama administration violated the U.S. Constitution when the car makers terminated franchise agreements while in bankruptcy restructuring.
Car Dealers Challenge Government
View Slideshow
Raymond McCrea Jones for The Wall Street Journal
More than 220 car dealers are alleging the Obama administration violated the Constitution when their franchises were terminated during the government-brokered bankruptcies of General Motors and Chrysler. Among those dealers is Herb Adcox of Chattanooga, Tenn., shown here.
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More photos and interactive graphics
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They are seeking compensatory damages ranging from $500,000 to more than $5 million apiece.
Two claims, initially filed in October 2010 and February 2011, cleared the government's motions to dismiss in February and are now heading into the pre-trial discovery phase. The dealers' lawyers are seeking government documents that they hope will show that auto makers had to eliminate some dealerships as a condition of receiving funds from the government's Troubled Asset Relief Program.
Some of the above replies may have some truth. However, it was the corporations that decided which points to close not the Obama Administration.
ReplyDeleteFurthermore, The Kingston Dodge (Pompey Dodge)franchise was not closed but relocated to Motor World in Wilkes Barre. There was not a Dodge franchise at MW prior to that.
Wilkes Barre had already lost the Wilkes Barre Dodge selling point on the Sans Souci Highway.
Other franchises around the country and locally (selling points) were closed and not relocated.
They may be selling dodge over at motor world but its not Pompay Dodge selling them
DeleteWhen Chrysler took Pompey’s Dodge franchise, he refocused his efforts on his buy here pay here operation. He has three BHPH lots under the moniker Car-Lotta Credit & Car Sales—the first opened in 1986, the second in 1999 and the third in 2008. When he closed the Dodge store, unfortunately having to layoff 28 employees in the process, he remodeled the building and moved one of his BHPH stores there. Pompey said, “I lost hundreds of thousands of dollars on this deal closing it down, but I’m still standing. My buy here pay here lots are very profitable … I’m a very lucky guy.”
http://www.autodealermonthly.com/76/3581/ARTICLE/Life-After-Chrysler.aspx
RE: Aggie95 Sept 6
ReplyDeleteYour correct.
Pompey is not selling Dodges at Motor World. Motor World is.
The franchise is owned by Motor World. Read my postings and you will understand.
BHPH may be profitable for the former dealer principal of Pompey Dodge but it is light years from having a new vehicle franchise. Personally, I am not a fan of BHPH. BHPH takes advantage of those least able to afford it.
Pompey my still be standing but "he" is the only surviving victim (unless you include the former PD body shop on Pierce St.) that remains of a once great Kingston business.