Wasted spaces: 2000 car dealerships closed. Suggestions?

[gdoane]

A typical car dealership is about 8 acres of asphault and showroom. With 2000 dealerships between Chrysler and GM closing down, that's about 16,000 acres of suburbia doing nothing.

This article in http://www.thedailygreen.com/environmental-news/latest/chrysler-dealerships-closing-47051403 suggests "Green Ways" to use these glaring reminders of the economic destruction wrought.

Now, I'm a conservative so I think the "Green Way" is the "Dumb Way," and of course these liberals don't fail to entertain coming up with ideas like making them a flower garden or a public art gallery.

So, what would a conservative do?

You know with the government bailout and holding most of the stock in the auto industry who's going to own these eyesores. The "taxpayer" is going to be stuck with these massive asphalt jungles.

One good use would be minimum security prison facilities. Anybody who has been stuck for hours in a car dealership knows that they're like prisons anyway. Liberals are always complaining that there's not enough prison space to lock up the dopers and the prostitutes, well, here ya go!

You can even hire some of the sales staff back to the old dealership as guards because after all, they know the place and they're used to detaining people. Just tell them to act like they're doing a credit check.

Another good use would be as a shooting range for all the guns that the Obama administration has sold to new purchasers fearing the Great Obama Gun Grab. After all, firearms proficiency will be a handy thing to have when Obama releases all of those Gitmo terrorists into our cities and towns. With a little practice, we can take care of the Gitmo terrorists the American Way. We don't want any woundings. That would drive up our health care costs even more.

Finally, with all of these stories of "tent cities" popping up we could designate these old dealerships as "Obamavilles" and have the newly homeless put their Colemans and sleeping bags there instead of under freeway overpasses.

[LouC]

I say to let the owners decide what to do with their lots.

[wayoverthehill]

I say to let the owners decide what to do with their lots.Many of them do not own their land or building. They are leased from Chrysler.

[LouC]

Many of them do not own their land or building. They are leased from Chrysler.

And what part of letting the owner decide is not covered by my statement?

If the Greens want to convert property let them begin with that property which they own.

[John2598]

A closed dealership could be turned into a drive-in theater. Is anyone here old enough to remember those? The building itself could be used for restrooms and sales of popcorm and other miscellaneous tooth rotting snacks. Then some of the offices could be rented to a dentist and a weight-loss doctor.

[gdoane]

I say to let the owners decide what to do with their lots.

When a company goes bankrupt, the property goes to the creditors and right now the biggest creditor of the bankrupt auto industry is the Federal Government. The other creditors would be the banks, but the Federal Government is the biggest creditor to the banks too.

Which means the Federales just bought a whole bunch of American Suburbia.

Which leads to another problem, State and Local property taxes on these huge abandoned chunks of land. If the taxes aren't paid, then the State gets ownership of the property. So the Federal Government just got put on the hook for thousands of acres of commercially zoned property which is usually the highest tax rate on the books.

This is a bit of a sticky wicket because a whole bunch of County Tax Assessors are going to be saying "Somebody owes me about $10,000 in taxes on this here commercially zoned property" and cash-strapped local governments aren't going to take "no" for an answer.

No matter how this ball rolls, those dealerships will be owned by the taxpayers either at the Federal or Local level. They're going to have to do something with them. The government doesn't run on real estate, it runs on money so it's got to find a use for these lands. Normally they'd sell 'em but to whom?

Car dealers don't want them. Retailers are closing stores, not opening new ones. Banks have more property now than they know what to do with from foreclosures. So who could the government sell these useless (but pricey) lots of land to?

Nobody, so they're stuck with them and they have to find a use for these eyesores.

It's probably the newest addition to Section 8 housing. The new projects.

[mysticbeauty_nbeast]

A typical car dealership is about 8 acres of asphault and showroom. With 2000 dealerships between Chrysler and GM closing down, that's about 16,000 acres of suburbia doing nothing.

This article in http://www.thedailygreen.com/environmental-news/latest/chrysler-dealerships-closing-47051403 suggests "Green Ways" to use these glaring reminders of the economic destruction wrought.

Now, I'm a conservative so I think the "Green Way" is the "Dumb Way," and of course these liberals don't fail to entertain coming up with ideas like making them a flower garden or a public art gallery.

So, what would a conservative do?

You know with the government bailout and holding most of the stock in the auto industry who's going to own these eyesores. The "taxpayer" is going to be stuck with these massive asphalt jungles.

One good use would be minimum security prison facilities. Anybody who has been stuck for hours in a car dealership knows that they're like prisons anyway. Liberals are always complaining that there's not enough prison space to lock up the dopers and the prostitutes, well, here ya go!

You can even hire some of the sales staff back to the old dealership as guards because after all, they know the place and they're used to detaining people. Just tell them to act like they're doing a credit check.

Another good use would be as a shooting range for all the guns that the Obama administration has sold to new purchasers fearing the Great Obama Gun Grab. After all, firearms proficiency will be a handy thing to have when Obama releases all of those Gitmo terrorists into our cities and towns. With a little practice, we can take care of the Gitmo terrorists the American Way. We don't want any woundings. That would drive up our health care costs even more.

Finally, with all of these stories of "tent cities" popping up we could designate these old dealerships as "Obamavilles" and have the newly homeless put their Colemans and sleeping bags there instead of under freeway overpasses.

I'd go with your last suggestion...Obamville camps. Most cities have one or two sites for the homeless usually downtown...in run down buildings with limited space. Open up these old 'shrines' to the car industry and make um into homeless shelters. Fantastic idea! :clap:

~Mysty

[smyrna]

The economy did not close these dealerships. These are stores that have proven themselves strong enough to withstand the economic trauma. In very, very few cases are the facilities owned by the manufacturer. The sign out front is the only thing owned by the factory. To close dealerships to help improve their business strategy when the idea is to sell automobiles is beyond me.:rolleyes:

[gdoane]

I'd go with your last suggestion...Obamville camps. Most cities have one or two sites for the homeless usually downtown...in run down buildings with limited space. Open up these old 'shrines' to the car industry and make um into homeless shelters. Fantastic idea! :clap:

~Mysty

I've never understood the placement of homeless shelters downtown. There's no jobs downtown by the courthouses and capitol buildings unless you're a Judge, a Lawyer or a Politician and that's not the kinds of jobs homeless people qualify for.

They need to be out where real people jobs are found, not stuck in a political epicenter with the justice court and capitol building.

Between the Oklahoma City bombing of the Federal Courthouse and the 9-11 attack on the Pentagon, getting a job in a government building anymore requires a background check that homeless people would have a hard time passing.

Get the homeless out where the jobs they can fill are found. Not downtown.

[gdoane]

The economy did not close these dealerships. These are stores that have proven themselves strong enough to withstand the economic trauma. In very, very few cases are the facilities owned by the manufacturer. The sign out front is the only thing owned by the factory. To close dealerships to help improve their business strategy when the idea is to sell automobiles is beyond me.:rolleyes:

Car sales dropped by 3 Million units from about 16 Million new vehicles sold in 2007 to 13 Million new vehicles sold in 2008. Any business that drops 20% of its customer base is going to have to downsize and adjust to what the consumers are doing, or in this case, NOT doing which is buying cars.

These automakers are in survival mode now. Pontiac is almost certainly out of business as every plan by GM put out there cuts that brand dead. There won't be any 2010 Pontiacs.

[mysticbeauty_nbeast]

I've never understood the placement of homeless shelters downtown. There's no jobs downtown by the courthouses and capitol buildings unless you're a Judge, a Lawyer or a Politician and that's not the kinds of jobs homeless people qualify for.

They need to be out where real people jobs are found, not stuck in a political epicenter with the justice court and capitol building.

Between the Oklahoma City bombing of the Federal Courthouse and the 9-11 attack on the Pentagon, getting a job in a government building anymore requires a background check that homeless people would have a hard time passing.

Get the homeless out where the jobs they can fill are found. Not downtown.

And...there is one more added bonus..:mrgreen:.....it would allow the residence of suburbs to actually 'see' just how many homeless they have in any given neighborhood. Gee...wonder what the libs would do if they actually saw what their legislation and lobbied created laws wrought? Hmmmm...perhaps a little visual shock therapy would change how libs do business? Nahhh...never mind...thats far to logical a thought to apply to where I live....Arnie and his wanna be Kennedy wife would have a fit to have to see that every day! :confused:

Still...I like the idea...really like the idea. Personally, I think it would work wonders for the state I call home.

~Mysty

[smyrna]

Car sales dropped by 3 Million units from about 16 Million new vehicles sold in 2007 to 13 Million new vehicles sold in 2008. Any business that drops 20% of its customer base is going to have to downsize and adjust to what the consumers are doing, or in this case, NOT doing which is buying cars.

These automakers are in survival mode now. Pontiac is almost certainly out of business as every plan by GM put out there cuts that brand dead. There won't be any 2010 Pontiacs.

There is no doubt that the business is going south. Car dealers are a nominal expense to a manufacturer and the revenues generated far exceed the costs. Closing plants, cutting employees and management, negotiate new contracts with the UAW and find a solution to the costs of retirees are all ways to lower expenses but reducing dealerships reduces revenues. This makes no sense. There are a few stand alone Pontiac stores in major metro markets that would possibly be empty.

The only stores that I know of that are either owned or partly owned by the factory are minority stores. There is a branch of the manufacturer(dealer development) that puts minorities into stores and doesn't require the same capitalization requirements as other non-minority potential dealer candidates. If these get shut down, they may go back to the factory.

[ImNewHere]

One good use would be minimum security prison facilities. Anybody who has been stuck for hours in a car dealership knows that they're like prisons anyway. Liberals are always complaining that there's not enough prison space to lock up the dopers and the prostitutes, well, here ya go!


Minimum security isn't good enough. They are fairly easy to escape from. But I do think you're on the right track. The existence of the FEMA death camps is well documented and they will probably be used as a holding facility before most of us can be exterminated in the name of the New World Order.

Laugh all you want at that. But a couple of years ago you laughed at the idea of the New World Order at all. Now it's mainstream news. You still laugh at those of us who tell you about their agenda, but enjoy it while you can. Because in a little while, there will be many of us who can only say we told you so.

[wayoverthehill]

And what part of letting the owner decide is not covered by my statement?

If the Greens want to convert property let them begin with that property which they own.I read it in the context of the former dealership owners deciding. But of course, you are correct. Just a matter of interpretation. :D

[WhiteHatBobby]

Obama went after Pontiac because of political correctness. Any genius knows that.

I'll tell you what I predict happens:

The Gutheries lost the Jeep dealership it had since 1962 and lost Pontiac (since post-WWII) thanks to the Obammy's PC Movement, will just expand its Honda dealership and add more spaces for its business truck, service centre, and body shop for now. There isn't a body shop at the one Chrysler dealership that's left, nor the Chevrolet dealership in town.

The Biltons and Behrs (lose a Chevrolet dealership in Holly Hill, the only dealership with a 30-mile radius) will probably be courting Saturn once The Captain makes the acquisition (don't be surprised if he buys Hummer and Pontiac too). Penske Motors is starting to become a new player in the auto industry. Watch for Penske to court all of GM.

[gdoane]

There is no doubt that the business is going south.

They've done gone south. That bird has done migrated.

Car dealers are a nominal expense to a manufacturer and the revenues generated far exceed the costs.

There we're going to have to disagree and here's the reason why I disagree with it:

Unsold inventory is a killer in most any business. All of those clearance sales you see at stores at the changing of the season aren't a gimmick. The retailers really want their shelf space back for the latest-greatest because moving product makes money and sitting product costs money. If it's summertime and you're trying to sell ice skates while your competition is selling sunscreen then you've got an obvious problem. You need your shelf space back to move products that sell. Being stuck with unsold product is a money losing proposition.

Automobiles are a depreciating asset. My 2008 F-150 was worth $22,000 when I drove it off the lot new last year. Today it's worth about $9,000. Losing over $1,000 per month is some serious depreciation (but nothing compared to the $10,000 per month my house lost in value last year) and that's why dealerships are a money-losing proposition which auto makers are trying to rid themselves of.

Dealerships buy cars the same way most people do: credit. Now in their case it's usually a sweetheart deal through Ford Motor Credit or GMAC or Chrysler Financial Services, but the vehicles are still depreciating assets bought on credit. That's fine if you've got the product rotation to beat the game but a disaster if you don't and right now, with consumers buying 20% fewer new vehicles, that game is over.

Closing plants, cutting employees and management, negotiate new contracts with the UAW and find a solution to the costs of retirees are all ways to lower expenses but reducing dealerships reduces revenues. This makes no sense. There are a few stand alone Pontiac stores in major metro markets that would possibly be empty.

Well, think about the opposite extreme. Increasing dealerships wouldn't increase revenues, it would just mean more unsold cars bought on credit and depreciating on the lot. If Joe's Auto Jamboree calls Chrysler Financing and wants 100 Jeeps for $20,000 apiece, that's $2,000,000 worth of wheels and if he can't sell them and they're the collateral (they usually are) depreciating by even only $1,000 per year, it's a losing proposition of $100,000 per year.

The dealer makes no money, forfeits the collateral (which has lost $100,000 in value) and Chrysler Financing is screwed because not only didn't they get any interest on the loan, they've lost 5% on the value of the collateral which they can't unload any better than the dealership could.

The only stores that I know of that are either owned or partly owned by the factory are minority stores. There is a branch of the manufacturer(dealer development) that puts minorities into stores and doesn't require the same capitalization requirements as other non-minority potential dealer candidates. If these get shut down, they may go back to the factory.

Dealerships buy on credit. They go bankrupt. Their assets belong to the creditors at that point and the creditors are the automakers financing arms. The property winds up in the hands of the automakers, which themselves are going bankrupt to their own major creditor, the Federal Government.

Which means the assets which were once collateral are now Government Property.

I have no comment about the affirmative action dealerships other than to say that business lives and dies by its own merits. If government could prop up a business through law then Amtrack might have made a buck but it's lost money every year since its inception in 1970.

[notluzn]

They will make them Monuments for Obama

[blackcatrun]

I say to let the owners decide what to do with their lots.

YOU IMPLY WE HAVE PERSONAL PROPERTY ON A PUBLIC BOARD! What do want to be in a "re-education camp"?

Remeber times have changed and our lives are not our's any more.

[ImNewHere]

They will make them Monuments for Obama

Try checking out the Georgia Guidestones.

http://www.youtube.com/watch?v=wHXfwPt-WZE

[gdoane]

They will make them Monuments for Obama

Memorials are usually in the names of Hospitals and Schools.

If that socialist fool Obama gets his way with Health Care our closed Hospitals can be named "Oh No We Couldn't" Memorial Medical Center.

If Obama gets his way with appeasing Middle East Terrorists our bombed and destroyed schools can be named "Hope and Change Bombing Range Elementary".

With our government taking over private enterprises like banks and automakers and probably health care, while depending on revenue from private enterprise for it's own existence, it becomes a snake swallowing its own tail.

The schools are doomed anyway because with school funding dependent on property taxes and property values in a tailspin, school budgets are in a tailspin themselves.

Hospitals, if they're shifted to depend on revenues from government-owned insurance companies and government has no money because it's become its own largest revenue source then Hospitals get no money and close down.

[blackcatrun]

Memorials are usually in the names of Hospitals and Schools.

If that socialist fool Obama gets his way with Health Care our closed Hospitals can be named "Oh No We Couldn't" Memorial Medical Center.

If Obama gets his way with appeasing Middle East Terrorists our bombed and destroyed schools can be named "Hope and Change Bombing Range Elementary".

With our government taking over private enterprises like banks and automakers and probably health care, while depending on revenue from private enterprise for it's own existence, it becomes a snake swallowing its own tail.

The schools are doomed anyway because with school funding dependent on property taxes and property values in a tailspin, school budgets are in a tailspin themselves.

Hospitals, if they're shifted to depend on revenues from government-owned insurance companies and government has no money because it's become its own largest revenue source then Hospitals get no money and close down.

Best thing that really can happen in the long run is the schools and hospitals collaspe completely. Government run into the ground means a freedom for us as a Republic.

Not because I am any fan for the sufferage on any one. As they say things move to a direction for survival in America. What wont work any longer is replaced by what will as far away from from the collaspe as possible. Which means a lot of this nation will find the doctor is more suited to cure instead of redtaped...and small well defined schools more apt to produce indapendant strong thinking kids instead of mindless ant like algore clones.

[LoneStarHero]

Good question in the OP Gene!

I think the closings are an awesome opportunity for many small business to pick up some prime freeway feeder real estate on the cheap.

On the other hand it could be used for Fry's, Best Buy, Costco, Wal-Mart, Kroger, Randall's, etc. to open up yet another store.

My veiled pseudo-"hate on the big corporations" attitude aside, those businesses would be a lot more beneficial to me than a huge lot that sells nothing but debt inducing (usually) depreciating assets.

[smyrna]

They've done gone south. That bird has done migrated.



There we're going to have to disagree and here's the reason why I disagree with it:

Unsold inventory is a killer in most any business. All of those clearance sales you see at stores at the changing of the season aren't a gimmick. The retailers really want their shelf space back for the latest-greatest because moving product makes money and sitting product costs money. If it's summertime and you're trying to sell ice skates while your competition is selling sunscreen then you've got an obvious problem. You need your shelf space back to move products that sell. Being stuck with unsold product is a money losing proposition.

Automobiles are a depreciating asset. My 2008 F-150 was worth $22,000 when I drove it off the lot new last year. Today it's worth about $9,000. Losing over $1,000 per month is some serious depreciation (but nothing compared to the $10,000 per month my house lost in value last year) and that's why dealerships are a money-losing proposition which auto makers are trying to rid themselves of.

Dealerships buy cars the same way most people do: credit. Now in their case it's usually a sweetheart deal through Ford Motor Credit or GMAC or Chrysler Financial Services, but the vehicles are still depreciating assets bought on credit. That's fine if you've got the product rotation to beat the game but a disaster if you don't and right now, with consumers buying 20% fewer new vehicles, that game is over.



Well, think about the opposite extreme. Increasing dealerships wouldn't increase revenues, it would just mean more unsold cars bought on credit and depreciating on the lot. If Joe's Auto Jamboree calls Chrysler Financing and wants 100 Jeeps for $20,000 apiece, that's $2,000,000 worth of wheels and if he can't sell them and they're the collateral (they usually are) depreciating by even only $1,000 per year, it's a losing proposition of $100,000 per year.

The dealer makes no money, forfeits the collateral (which has lost $100,000 in value) and Chrysler Financing is screwed because not only didn't they get any interest on the loan, they've lost 5% on the value of the collateral which they can't unload any better than the dealership could.



Dealerships buy on credit. They go bankrupt. Their assets belong to the creditors at that point and the creditors are the automakers financing arms. The property winds up in the hands of the automakers, which themselves are going bankrupt to their own major creditor, the Federal Government.

Which means the assets which were once collateral are now Government Property.

I have no comment about the affirmative action dealerships other than to say that business lives and dies by its own merits. If government could prop up a business through law then Amtrack might have made a buck but it's lost money every year since its inception in 1970.

A new car on a dealers' lot doesn't normally depreciate. As new car prices increase during the year, the older ones at the older prices become a better value and go first. There are two times a year when a new car has potential to depreciate...new car introduction of next years model and the beginning of the next calendar year. If a dealer doesn't turn his/her inventory, then their interest expense goes up and they lose money...the market rights itself by that dealer going under. An auto dealership is strictly on commission...I wish all the world was. If they don't make the grade, the market and competition takes them out. It is the law of the jungle...period. The strongest, best run stores survive.

As far as inventory becoming gov't property...it has never happened before. These are unchartered waters. The last thing we need is the gov't in business. If a business was run like our gov't...need I say more? :))

The gov't has nothing to do with minority stores backed by dealer development. At least not until maybe now.

We may have to agree to disagree and time will tell. You remember me and I'll remember you. I say that the reduction of the number of stores by the manufacturer, not the market place was a mistake and will accelerate their demise. We'll see.

[gdoane]

Good question in the OP Gene!

Well, I drive down Camelback Road here in Phoenix which is the typical city "Motor Mile" of auto dealerships and I see the destruction wrought. Empty lot after empty lot left and right all across the heart of Phoenix tell the tale of woe in ways a newspaper byline simply can't match.

I think the closings are an awesome opportunity for many small business to pick up some prime freeway feeder real estate on the cheap.

The problem is if you're a small business then what do you want with an 8-Acre lot and a 30,000 square foot showroom? What's small about that?

What could happen is something like what happened to an old Home Depot (big box home improvement store) also on Camelback road in Phoenix which got parceled out. The first business to move in was a paintball sports center, but that didn't use the whole thing so it sublet other businesses and there's a windshield repair place in there, a small Mexican restaurant, a tile and shower installation biz is using the old loading docks to get the materials for their jobs on the trucks, and it's actually filled back up.

The problem is that it looks like it was planned by Rube Goldberg. There's no rhyme or reason to it. Partitions between businesses are pegboards and it has a swap-mart look to it. It works but it's ugly as sin.

On the other hand it could be used for Fry's, Best Buy, Costco, Wal-Mart, Kroger, Randall's, etc. to open up yet another store.

What the heck is Randall's? Oh yeah, the internet Google thingie.
You're talking about SAFEWAY. That's what they're called here in Phoenix. Like Kroger is called "Fry's Supermarket" in Phoenix. I was in Colorado for a week wondering what "City Market" was before I realized they're just another name for Fry's Supermarket.

A lot of these store chains change their names when you hit the State Line. I'm not sure if it's because of some marketing ploy where different State cultures are more comfortable with one name than with another or if it's just an offshoot of mass mergers while retaining local clientele. Probably a mixture of both.

My veiled pseudo-"hate on the big corporations" attitude aside, those businesses would be a lot more beneficial to me than a huge lot that sells nothing but debt inducing (usually) depreciating assets.

While it's true that half of a loaf is better than no loaf at all, such a one-size-fits-all plan wouldn't work in all locations, or even most locations.

For example, Power Chevrolet at the I-17 and Camelback Road. (I don't know why they call it Interstate 17 because good luck finding it anywhere but in Arizona) has every single store chain you mentioned (taking into account territorial translations) within eight miles of it. Two full-blown Wal*Marts are within four miles of that closed dealerships. Another one there would be an incredibly bad idea.

I think the mini-mall concept like what happened to the old Home Depot big box store on Camelback Road is probably the real solution but it needs to be a more managed solution. Getting a mish-mash where you can go play paintball war games and have your bathroom remodeled in one convenient location is just strange bedfellows.

Or, failing that, the economy goes into the toilet, gas hits $100 per gallon and we need those dealerships to sell us all bicycles. Maybe I should look into buying stock in Schwinn, Royce-Union and Huffy?

[LoneStarHero]

What the heck is Randall's? Oh yeah, the internet Google thingie.

You're talking about SAFEWAY. That's what they're called here in Phoenix. Like Kroger is called "Fry's Supermarket" in Phoenix. I was in Colorado for a week wondering what "City Market" was before I realized they're just another name for Fry's Supermarket.

A lot of these store chains change their names when you hit the State Line. I'm not sure if it's because of some marketing ploy where different State cultures are more comfortable with one name than with another or if it's just an offshoot of mass mergers while retaining local clientele. Probably a mixture of both.


The name changes are due to mergers and acquisition. Why attempt to change the local client base and loyalties by switching names to the typically unknown outside the region parent company?

The Fry's I was talking about is the computer/electronics store. A few more of them wouldn't be such a bad thing as there are only three locations in the Houston area.

[gdoane]

A new car on a dealers' lot doesn't normally depreciate.

It does depreciate and here's the reason why: If you've got a car on the lot then you've got to keep it clean. Car washes cost money. You've got to keep it inventoried and accounted for, and inventorying and accounting cost money.

Think about it, if you've got 200 cars and a rainstorm rolls through, then you've just bought 200 car washes at $5 apiece. You lose a thousand bucks in profit every time a cloud coughs. Hope it's not a hailstorm!

The longer the car sits, the less profit the dealership will be able to make from it because keeping a car isn't free. Not even for dealers. The cars need to be kept in salable condition, they need to be accounted for and maintained and the longer the car sits, the more those costs rack up and the less profit a dealer realizes.


As new car prices increase during the year, the older ones at the older prices become a better value and go first. There are two times a year when a new car has potential to depreciate...new car introduction of next years model and the beginning of the next calendar year.

Your calculation is sound but it leaves a very important equation out of the picture. USED CARS. The value of new cars between 2007 and 2008 dropped by $1,000 on average because of factory incentives and rebates and the like. The value of used cars however only dropped by $200 on average in the same period because consumer confidence turned a lot of buyers to used vehicles many of which are cheap enough to buy flat out cash on the barrelhead.

Used car dealers are hurting in this economy too, but not as badly as new car dealers because when people are pinching pennies the used car gets people on the road for cheaper.

If a dealer doesn't turn his/her inventory, then their interest expense goes up and they lose money...the market rights itself by that dealer going under. An auto dealership is strictly on commission...I wish all the world was. If they don't make the grade, the market and competition takes them out. It is the law of the jungle...period. The strongest, best run stores survive.

You can be the best dinosaur in the world but if the planet won't support your cold-blooded species then extinction is certain through no fault of your own.

The customers aren't there to sell to. Nobody who needs credit can get credit. If you don't need credit then you're sitting pretty and can write your own ticket but most people aren't in that situation which means that most people can't be customers. It's the Credit Ice Age.


As far as inventory becoming gov't property...it has never happened before. These are unchartered waters. The last thing we need is the gov't in business. If a business was run like our gov't...need I say more? :))

The gov't has nothing to do with minority stores backed by dealer development. At least not until maybe now.

We may have to agree to disagree and time will tell. You remember me and I'll remember you. I say that the reduction of the number of stores by the manufacturer, not the market place was a mistake and will accelerate their demise. We'll see.[/quote]

[gdoane]

The name changes are due to mergers and acquisition. Why attempt to change the local client base and loyalties by switching names to the typically unknown outside the region parent company?

There's a lot to be said for universal recognition. Americans do travel a lot, after all.

For example, I was in Dubai, UAE browsing the Arabian sights and I saw a red-and-white striped bucket on a pole. A Kentucky Fried Chicken in Dubai. I'm literally halfway around the world from home and I have a shot at getting KFC coleslaw! Woo-Hoo!

The Fry's I was talking about is the computer/electronics store. A few more of them wouldn't be such a bad thing as there are only three locations in the Houston area.

I know which one you were talking about and there are only two locations in the Phoenix area. The problem with Fry's Electronics is if you're in the store it's pretty much a given that you've got disposable income. They sell toys. Expensive ones.

I'm assuming you've been in a Fry's Electronics here, so I'm not telling you anything that you don't already know. There is about 300 feet of impulse buy aisle between you and the checkout counter, kind of like the candy bars at the average grocery but about 100 times the size.

It's entirely likely, even probable, that most of the purchases made in a Fry's Electronics are the kinds of impulse buys that get people into credit trouble.

Fry's Electronics is almost a perfect rendition of product placement marketing. I mean, I know what they're doing and if you know what you're looking for you'll see the art behind impulse marketing. I kind of admire their psychological marketing prowess.

Look at their computer sections. They keep the PC parts and the pre-built PC's in seperate sections. WHY? Because they want to keep the customers who know what they're doing away from the customers who just want a box. They keep the impulse buyers away from the people who might ruin an impulse purchase.

If you know what they're up to, it's a good show. It's kind of like watching Candid Camera knowing Alan Funt is behind the whole gag, but for the typical consumer going into the place, it's just a cow being led to the slaughterhouse. They're VERY good at impulse buy marketing and they can have a consumer smoking a credit card in a minute flat.

In this economy, we need educated consumers, not educated retailers. This crisis was caused by consumers not knowing what they're doing. The retailers already have their game down pat.

[Clamp]

It takes roughly 8 acres of solar panels to generate 1MW of electricity. I wonder if this is the next thing we'll be purchasing....

[smyrna]

It does depreciate and here's the reason why: If you've got a car on the lot then you've got to keep it clean. Car washes cost money. You've got to keep it inventoried and accounted for, and inventorying and accounting cost money.

Think about it, if you've got 200 cars and a rainstorm rolls through, then you've just bought 200 car washes at $5 apiece. You lose a thousand bucks in profit every time a cloud coughs. Hope it's not a hailstorm!

The longer the car sits, the less profit the dealership will be able to make from it because keeping a car isn't free. Not even for dealers. The cars need to be kept in salable condition, they need to be accounted for and maintained and the longer the car sits, the more those costs rack up and the less profit a dealer realizes.

That isn't depreciation. It is a maintenance expense. A new car dealer will try and keep a 45 day to 90 day inventory of new cars depending the time of year...in a perfect world. Cleaning the inventory is done regardless of rain. It is a constant throughout the year. The name of the game is to turn the inventory...we do not disagree. We were discussing that new cars do not depreciate except for the two times a year I mentioned and even that, is not certain.


Your calculation is sound but it leaves a very important equation out of the picture. USED CARS. The value of new cars between 2007 and 2008 dropped by $1,000 on average because of factory incentives and rebates and the like. The value of used cars however only dropped by $200 on average in the same period because consumer confidence turned a lot of buyers to used vehicles many of which are cheap enough to buy flat out cash on the barrelhead.

A rebate is offered by the manufacturer. This also is not depreciation. The end price to the consumer drops at the expense of the manufacturer.

Used car dealers are hurting in this economy too, but not as badly as new car dealers because when people are pinching pennies the used car gets people on the road for cheaper.

Agreed.

You can be the best dinosaur in the world but if the planet won't support your cold-blooded species then extinction is certain through no fault of your own.

The customers aren't there to sell to. Nobody who needs credit can get credit. If you don't need credit then you're sitting pretty and can write your own ticket but most people aren't in that situation which means that most people can't be customers. It's the Credit Ice Age.

Just as in the ice age, it is nature that makes the decision. If the market can't support the dealers, they will fold. The law of the jungle...the best of the best. No politics, no interference, just the strong will survive. No manufacturer or gov't interference in closings...except for the same reasons that manufacturers have always had the right to close dealerships which are listed in the franchise contract.

[gdoane]

It takes roughly 8 acres of solar panels to generate 1MW of electricity. I wonder if this is the next thing we'll be purchasing....

Solar panels are horrible because of their attraction to vandalism. I work on remotely located solar panels which are used to power emergency radio systems out at lakes where cell phone coverage is futile and vandals LOVE LOVE LOVE to smash solar panels.

The rivers and lakes have a lot of big rocks available and a bunch of drunken idiots who see a big piece of glass and a big rock nearby and just can't help themselves. HULK SMASH!!

Solar panels are horrible for the environment because manufacturing them requires mining and glass making and electronics and they don't last a month before some yahoo wants to see how it ****ters or how it looks with his gang logo spray painted on it.

The only way solar power makes sense is if the panels have a useful life span of over ten years. Put one out in American Suburbia and there's no way it lasts ten years or even ten months without some punk smashing it or spray painting "Vote Obama" on it.

[WhiteHatBobby]

Wind and solar is the Obama mantra. Nothing else applies.

[countmein]

Toyota, Honda, Mazda, Nissan, and/or Hyundai could grab some prime locations for a steal I am guessing.

[gdoane]

That isn't depreciation. It is a maintenance expense. A new car dealer will try and keep a 45 day to 90 day inventory of new cars depending the time of year...in a perfect world. Cleaning the inventory is done regardless of rain. It is a constant throughout the year. The name of the game is to turn the inventory...we do not disagree. We were discussing that new cars do not depreciate except for the two times a year I mentioned and even that, is not certain.

Semantics. Depreciation and lost profit have the same end result.

When I bought my truck last year I got a lot of inside info because I bought it with a Ford "Friends and Family Plan" which is for employees of Ford. I got a better price than the dealer could have gotten, basically because I know a retired Ford woman who can call the company and request a special factory deal.

One of the incentives that knocked my truck down from factory list of $22,000 to what I paid ($14,000) was Ford Motor Company Financing taking an additional $1,000 off list price.

I wasn't going to finance the truck at all. I could write a check for $14,000 no problem. However, to get the financing "deal" my maximum down payment was only $8,000. I'd never heard of a maximum down payment before. I'd heard of minimum down payments.

I told the salesman my plan (I'm an honest guy) to just put down the maximum $8,000 and then when Ford Motor Credit hit me with a payment book to just blow it out of the water in one payment.

That was when I found out a dirty little secret. When rebates fall through they hit the dealership. My little trick of financing the purchase for a rebate but not really needing to would cost the dealership the amount of the rebate unless I carried a balance for at least three months.

I hate driving vehicles that I don't outright own. I had to make three payments to get the dealer off the hook for the rebate or else Ford Motor Credit would backcharge the dealership the rebate for financing a guy who didn't need financing. Most customers wouldn't care who they screwed over but I do. I'm the kind of guy who counts the change and returns the money if the cashier screws up and gives me too much change.

A rebate is offered by the manufacturer. This also is not depreciation. The end price to the consumer drops at the expense of the manufacturer.

That's what I was talking about above. The dealer is basically bait on the hook. The factory keeps control. They control the prices, they control the rebates, they control the warranties, and the dealership has little to no wiggle room.

My truck could break down (probably won't, 2004-2008 F-150 V-6 is bar none the most reliable domestic pickup truck ever made in Consumer Reports history) and any dealership is required to service it under factory warranty. And free towing. And another vehicle to use while they fix the problem if service takes more than one day.

The manufacturers own the dealerships, if not in fact then in deed.

<snip>

[ScottFree]

Level the buildings, tear out the asphalt, and turn them in to Frisbee golf courses. Libs love those.

[gdoane]

Level the buildings, tear out the asphalt, and turn them in to Frisbee golf courses. Libs love those.

Problem: my 1/4 acre of residential property costs about $4,000 per year in property taxes and an 8-acre property in the city proper needs to produce 32 times that much tax revenue to be fair. Can a Frisbee golf course make money while paying $128,000 to the tax man every year?

The short answer is "no".

The dilemma is this: We're seriously looking at property taxes at 2,000 dealerships across the nation defaulted on to the tune of $100,000 apiece. That's what, $20 Million? A million here and a million there, and soon you're talking about some serious money!

The properties need to produce revenue enough to pay a basic tax rate of at least 10% which means we need to come up with an idea that makes a $128,000 tax viable with a $1,280,000 annual biz.

I don't think Frisbee Golf is going to clear $3,500 per day as a business. 350 customers per day paying $10 apiece for the merriment of Frisbee golf is just not in the realm of serious consideration.

I like the mega bicycle dealership idea better. When gas hits $5 per gallon this summer a lot of people are going to be looking at the Schwinns costing less than a tank of gas.

[highroller]

What they do in my city is make parking lots out of them.

[LoneStarHero]

Solar panels are horrible because of their attraction to vandalism. I work on remotely located solar panels which are used to power emergency radio systems out at lakes where cell phone coverage is futile and vandals LOVE LOVE LOVE to smash solar panels.

The rivers and lakes have a lot of big rocks available and a bunch of drunken idiots who see a big piece of glass and a big rock nearby and just can't help themselves. HULK SMASH!!

Solar panels are horrible for the environment because manufacturing them requires mining and glass making and electronics and they don't last a month before some yahoo wants to see how it ****ters or how it looks with his gang logo spray painted on it.

The only way solar power makes sense is if the panels have a useful life span of over ten years. Put one out in American Suburbia and there's no way it lasts ten years or even ten months without some punk smashing it or spray painting "Vote Obama" on it.

I'm a huge proponent of fossil fuels, but I have some idea to make solar viable.

Why not build tower structures that will be out of reach to vandals? Or better yet, kill two birds with one stone and attach solar panels to windmill infrastructure?