General Motors Corp. has told its roughly 4,000 surviving dealers to stop selling non-GM brands in their showrooms by the end of this year, said an official of the company.
Mark LaVeve, GM’s vice president for sales, services and marketing, told the Detroit News in a letter that the dealers must also be prepared to sell more vehicles and improve the look of their showrooms, if necessary.
GM is seeking to close at least 2,400 of its nearly 6,200 dealers during its stay in bankruptcy court.
The company said it expects that its continuing dealers will remove non-GM brands from the GM showroom by Dec. 31, 2009, and will operate a showroom exclusive to GM products going forward…
Nearly 90 percent of GM’s continuing dealers have signed or verbally agreed to the participation agreements…
Should franchise agreements have this kind of power?
Franchise contracts are powerless if they are illegal. In some places, this GM move amounts to either a suppression of trade or anti-competitiveness. But as GM is now basically a government department and it’s staff are overpaid civil servants, it might be considered to be OK. Hard to tell, really.
#19 It is perplexing…TARP, dictators (FDR, CZAR Obama), and putting secured bond holders after unsecured are unconstitutional…and arguably destroying the Republic…
But there were some mitigating circumstances on the Chrysler bond holders argument:
http://money.cnn.com/2009/06/09/news/economy/supreme_court_chrysler/index.htm
It might be…and I certainly didn’t research this to know, I’m guessing with no knowledge of the Court, that they are waiting for a more clear cut example of unconstitutionally taking property without compensation, by the Government.
#19 – You’re right. Isn’t it interesting how the liberals were terrified of the “scary conservative” Bush appointees? Yet that same “overly conservative” court is upholding the most amazing breaches of the Constitution. I don’t get it.
You WILL only sell the Government Model.
You WILL only sell it in the color we say.
You WILL only make the profit we say you can.
Signed,
Majority Stock Holder
(we do this for your own good)
#24 AND it will be the free market’s fault if you fail (and yours)…
Signed:
Your historic Leader
My favorite Dealer is closed, I can finally go buy a Toyota and don’t feel too bad about not giving business to my favorite GM dealer.
#21, “In some places, this GM move amounts to either a suppression of trade or anti-competitiveness.”
Anti-competitive? You mean like how the state governments involve themselves in the process in order to prevent these companies from selling directly to their customers, and instead are required to go through local middle-men (dealers)? Almost as bad as the death grip that liquor distributors maintain in many states.
If I want to sell Chevrolet and BMW what business is it of the government what I sell as long as they get their tax revenue?
This is madness! As a result may I take this opportunity to say to all of you who voted for Obama – You Suck!
I hope you like living in the soon-to-be 3rd world economy.
Dealers are given special protection by states, which prevent car makers from selling direct to customers (which a lot of customers would prefer and benefit from). Given that, GM has to strong arm dealers in order to put a good image out to the public. Buildings that are dirty and run down make GM look bad. A GM dealer selling Kia makes GM look bad. Get the states out of the picture, let GM sell direct if they want and then I’d back you saying GM shouldn’t have control over the look of the dealerships lots.
Those of you who think that this is a government decision are, once again, uninformed (surprise, surprise). These attempts by GM to stop dealers from selling competitive brands have been going on for years, with varying success. They’re either settled through negotiations or court. The bankruptcy has probably given GM’s VP for sales, services and marketing (Mark LaNeve, misspelled in the above article) an opportunity to tighten GM’s grip on remaining dealers.
http://detnews.com/apps/pbcs.dll/article?AID=/20090124/AUTO01/901240378
This is exactly the type of management decision that the administration wants to leave in the hands of GM managers.
What the eff is it with the right wing nuts? How the eff is Chrysler’s bankruptcy unconstitutional? Please, could one of you asshats just explain that?
This is what happens when Boss Limpdick owns stock in a company that goes belly up.
#8 jerry:
“what about charging much higher tariffs on foreign cars and giving the American auto industry some protection?”
Why do you want to punish me for buying a superior product that’s largely made in America?
#28, ‘temp,
This is madness! As a result may I take this opportunity to say to all of you who voted for Obama – You Suck!
Ya, maybe. But you right wing nuts that supported Bush got us into this mess. You suck BIG ONES.
Now quit crying like a baby, accept you idiots lost the election, stand back, and let a real man fix the economy.
#33 Mr. Fusion
>>you right wing nuts that supported Bush got us into this mess.
No, this entire mess is all on Obama or his teleprompter… it’s difficult to tell the difference.
Obama couldn’t fix a peanut and jelly sandwich much less an economy. You SUCK for always toeing the Obama line knowing full well he is full of crap. Just admit it and let the healing begin.
#31, “How the eff is Chrysler’s bankruptcy unconstitutional?”
Well, at least the Constitution actually grants the federal government the power to enact laws concerning bankruptcies. Which is a significant step up the justification ladder from 3/4 of the crap you regularly make up that the government is empowered to do.
Am I the only one who thinks it’s odd that the source for this information (at least the only link provided above) is a newspaper in China?
Mr fusion the reason that the Chrysler bankruptcy was so unconstitutional was that the govt broke it own laws when it negotiated the bankruptcy
bond holders are at the top of the list to get their money returned in a bankruptcy, in this bankruptcy the bond holders are getting back approx 10 cents on the dollar invested but the unsecured creditors like the unions ( who under federal law only get paid if there is money remaining from the secured creditors ) are getting back 44 cents on the dollar and they are receiving approx 45% of the company.
the laws that were broken are laws that date back to the founding of this country and now have been overturned by a corrupt Presidency paying back his supporters the unions with ill gotten and illegal funds
This is the last thing gm needs. If they are truly developing more fuel-efficient and innovative products after the restructuring they would want to have dealers showcase them next to competing brands, proving that they are not afraid to be compared. This and other recent moves shows just how afraid they are and just how far they are willing to go to screw over loyal dealers who still want to offer gm cars and trucks.
I wonder how many will just rip up their gm contracts like the (almost) worthless pieces of paper they are and sell other brands. I wonder how many of these and other dealerships who cannot get the contract renewed will start selling Honda, Toyota, KIA ect. just because it is a smart move instead of just going out of business.
I’ve said it before-
Chrysler as we know it is gone
GM as we know it is gone
Ford as we know it might be gone
and it is too early to tell what might rise from the ashes, if anything.
Finally, there is no truly American car company anymore and I am sick and tired of all the ‘don’t buy imports’ people out there trying to guilt me into buying an inferior product. I drive a Honda and buying it was a very patriotic experience because I still have the freedom to. They have plants in Ohio, Indiana, and Michigan. Wake me up when an affordable electric hits the market (and is not scrapped right away)…
PS, I live in Michigan, not far from Detroit.
#37 PMitchell, if you’ll read the article link provided by Alfred1 in comment #22, it will illuminate the side you’re not seeing of this issue. You can actually skip to the last few paragraphs if you’re short on time.
While the Indiana bondholders had a valid legal claim as you point out, if the Supreme Court had taken the case, the evidence suggests that the bondholders would have ended up being compensated less, and the company would have been destroyed as well. Chrysler was sold for much more money as a going concern, rather than merely liquidating its assets and paying bondholders from the much lesser amount of the liquidation proceeds.
#39
That’s a pretty big IF in your statement.
Toss in a few Maybes and a couple of Might have happens and the next thing ya know ya got global warming.
What is fact is that the government didn’t follow the rules and as soon as all the dust settles, when actual damages are assessed by the illegal action….then you’ll see some sparks fly.