Dealergate

[TomAiello 25]

Dealergate

Has anyone read up on this? Any thoughts?

I'm not sure what to think. I do find it absurd that profitable dealerships are being forced to close. I thought the idea was to maximize profits, but that doesn't seem to be what closing profitable enterprises would do. I tend to think this is just a case of general government incompetence, rather than actual malice.

But I'll admit that the statistical analysis here has made me scratch my head and start to wonder if there isn't some malice in the choices the government has made as to which dealerships to close.

-- Tom Aiello

[email protected]
SnakeRiverBASE.com

[mnealtx 0]

I've been watching it for the last several days - I agree, closing down profitable dealerships makes no sense from a business standpoint.

IF the closures were politically motivated (and, upon first look, it appears that at least SOME may have been) there's going to be some interesting times ahead.

Of course, the chances of it getting any traction outside of the blogosphere (and possibly FOX) is pretty damn slim.

Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706

[rehmwa 2]

surprised? - the party of 'the end justifies any means' combined with a highly unionize industry in action

it's a piece of art

now let's bash the source, the author, and statistics in general without discussing the results themselves - quick

...
Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants

[kelpdiver 2]

it's an interesting potential scandal, but the article is pretty sloppily written, and the misuse of numbers is common in political spheres. Even if not intentional, people see order in noise all the time.

Too little was spent in examining the claimed process used to determine the closures.

[wmw999 2,123]

It sounds a little too conspiracy-theory-ish, but troubling. So I went to the Zero Hedge website, and found the following quote.

Quote

(about the results, which were "dealers v. donations by candidate and/or party.
")This puzzled us. Why would there be an significant noticeable (we have rightly been called out for using significant here) and highly positive correlation between dealer survival and Clinton donors? Granted, that P-Value (0.125) isn't enough to reject the null hypothesis at 95% confidence intervals (our null hypothesis being that the effect is due to random chance), but a 12.5% chance of a Type I error in rejecting a null hypothesis (false rejection of a true hypothesis) is at least eyebrow raising. Most statistians would not call this a "find" as 95% confidence intervals are the gold standard for this sort of work. Nevertheless, it seems clear that something is going on here. Specifically, the somewhat low probability that the Clinton data showing higher survivability of Clinton donors could result just from pure chance. But why not better significance with any of the other variables? Why this stand out?

They're right; it doesn't match the gold standard for confidence level. That's also the smallest number of dealerships.

I think it probably ascribes a little too much power to the Clintons. Consider, if nothing else, that Obama doesn't show the same kind of correlation, neither is there for Democratic vs. Republican. So it's all about the Clintons.

If she were that powerful, and that evil, do you really think she would have been "allowed" to lose the presidential election?

All that said, if there's any truth to this, well, then however it happened needs to be nailed to the wall.

And as far as closing "profitable" dealerships, if those dealerships are too close together, maybe it's still the right thing to do, because there's a cost to the manufacturer just in the scale of the number of dealers to service. Toyota (as an example) as about 1200 dealers; GM has (before the closures) 6400. Last year, Toyota sold a few more cars worldwide than GM. Yes, those are apples and oranges, because the dealerships are US and the auto sales are worldwide, but it's what I could find in a hurry. Sounds like GM has a shitload more overhead, besides all the labor costs, and generally (apparently) piss-poor management that's danced with what brung 'em since the start of the 1973 gas embargo.

Wendy P.

There is nothing more dangerous than breaking a basic safety rule and getting away with it. It removes fear of the consequences and builds false confidence. (tbrown)

[TomAiello 25]

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And as far as closing "profitable" dealerships, if those dealerships are too close together, maybe it's still the right thing to do, because there's a cost to the manufacturer just in the scale of the number of dealers to service.

It's my understanding that the Chrysler dealerships are all run on a cash and carry basis--they have to pay Chrysler up front for the vehicles. That means that it's impossible for them to drag down Chrysler's bottom line.

I think that Toyota uses a different system, so they have different incentives to manage their dealerships.

-- Tom Aiello

[email protected]
SnakeRiverBASE.com

[piper17 1]

"General government incompetence?" Gee, aren't these the people that are going to be running our health care in the near future? That should really be fun!

"A man can never have too much red wine, too many books, or too much ammunition"...Rudyard Kipling

[TomAiello 25]

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"General government incompetence?" Gee, aren't these the people that are going to be running our health care in the near future? That should really be fun!

You may have missed it, but the federal government pretty much already does run our healthcare system. Which may explain why it's such a mess.

-- Tom Aiello

[email protected]
SnakeRiverBASE.com

[lawrocket 3]

I'd actually like to see some statistics on the donations of car dealerships in general, to see whether possibly 90% of car dealerships as a whole give to the GOP.

My wife is hotter than your wife.

[piper17 1]

well, I'm well aware that they certainly play a role...Medicare, etc but states really muck up the market each with their own specific regulations, etc.

If you think it is bad now, wait until "O" gets done with it....or as P.J. O'Rourke said "If you think healthcare is expensive now, wait until it's free"

"A man can never have too much red wine, too many books, or too much ammunition"...Rudyard Kipling

[councilman24 36]

In item 1 they have picked one criteria, political contributions, and ignored all other. Am I surprised the closed dealers contributed more to Rebulicans? No. But where's the analysis of the contributions of the open dealers? Probably the same ratios. I'd expect car dealers to be Republicans.

Then they go to specific examples for Dem contributions. But again, what other factors could have caused them to pick on over the other?

The entire realm of possible decision criteria, for all dealers, needs to be examined to make any conclusion.

And at some point in the article I found myself saying 'the winners do get to choose' Should anyone be surprised if there is SOME repayment or favoritism? Is it fair from either side? Perhaps not, but people make poitical contributions to like minded people for lots of reasons. One, they will be best for the office. They will be best for the country. They will be best for me. I want my piece of the pie. And how many groups make contributions to both so they get access no matter who wins?

Do I like it, no. That's why I don't take political contributions. Do I think there is a vast conspiracy to pick Dem dealers to stay open? No, but wouldn't surprise me if a staffer familiar with a contributor says to the decision maker I think you should close this one, not that one.

And I'm STILL waiting for my first bribe offer as a City Councilman after 11 years. You'd be amazed at how many people think I'm paid off, in bed with, friends with people who get postitive decisions by the City. Those people, ususally developers, usually don't even talk to me let alone buy me off. Not agreeing equates to not listening to people who don't get their own way.

Rant off.

I'm old for my age.
Terry Urban
D-8631
FAA DPRE

[sundevil777 93]

I don't understand how closing dealerships helps a car mfg improve profits. Do the mfgs have to finance the cars for the dealers before they're sold, or do the mfgs not get paid until they're sold? I understand that may be different for different mfgs, but what exactly does a mfg do for a dealer that costs the mfg money? I don't get it at all, since I thought the dealers were independent businesses.

People are sick and tired of being told that ordinary and decent people are fed up in this country with being sick and tired. I’m certainly not, and I’m sick and tired of being told that I am

[Remster 24]

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since I thought the dealers were independent businesses.

I'm sure they are. But I am also pretty sure there are several other ties between them and the manufacturers regarding marketing, financing, mfg rebates and incentives, quotas, etc...

Remster

[kelpdiver 2]

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I don't understand how closing dealerships helps a car mfg improve profits. Do the mfgs have to finance the cars for the dealers before they're sold, or do the mfgs not get paid until they're sold? I understand that may be different for different mfgs, but what exactly does a mfg do for a dealer that costs the mfg money? I don't get it at all, since I thought the dealers were independent businesses.

Dealers can do a lot of things that hurt the brand name, or the average selling price of the product. Crappy service is translated by the customer into crappy brand.

We know what foreclosures do to nearby real estate values - it's crushing. A failing car dealer has inventory to dump as well. And these are sales lost by the other dealers in driving range.

[likearock 1]

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Quote

I don't understand how closing dealerships helps a car mfg improve profits. Do the mfgs have to finance the cars for the dealers before they're sold, or do the mfgs not get paid until they're sold? I understand that may be different for different mfgs, but what exactly does a mfg do for a dealer that costs the mfg money? I don't get it at all, since I thought the dealers were independent businesses.

Dealers can do a lot of things that hurt the brand name, or the average selling price of the product. Crappy service is translated by the customer into crappy brand.

We know what foreclosures do to nearby real estate values - it's crushing. A failing car dealer has inventory to dump as well. And these are sales lost by the other dealers in driving range.

Sounds to me like the biggest reason is to liquidate the excess inventory, especially since they're giving them a June 9 deadline to get rid of everything. Until that happens, the manufacturers will be butting up against that old law of supply and demand and will have a tough time making a profit. Doesn't make it right though.