In a prior post, I questioned the savings to be gained by Chrysler and GM from cutting the number of dealers they had. Clearly there would be some small savings in support costs, but most companies would rather be over-distributed than under-distributed, so those savings could not be a real reason. Clearly, also, there were some dealers that should have been terminated, but 25%+ of the dealers, not clear to me that makes sense.
Anyway, today, Reuters reported that “GM, Chrysler say dealer cuts crucial for turnaround.” If you read the article no where does it explain why? So, still stumped here. If anyone has a thought, please share.
Along the same lines, I read with interest and dismay that Chrysler had been “stuffing the channel” with cars up until the last minute before they terminated the dealers in bankruptcy. The poor dealers who bought inventory thinking they would be protected for “being part of the team” are now stuck with cars they can’t sell from a dealership that is losing its franchise rights from a company that is legally protected from having to take the excess inventory back.
Any you wonder why the channel generally hates its suppliers?