The Last Outpost Car Dealer

Some conservative blogs as well as NEWSMAX are kicking up a little dirt recently by claiming that Chrysler dealerships owned by Republican-leaning donors are somehow being shut down by the Obama Administration. And in a few cases, a loose example here or there has been used to perpetuate this story. However the facts emerging quickly blow the lid off this latest conservative urban myth that is currently circulating.

It appears that the dealerships that Chrysler wants to survive are dealers whose property is large enough to house all three Chrysler product lines, Chrysler, Dodge and Jeep under one roof. And it is only smaller dealerships whose buildings or operations are too small to include all brands that are being forced out of business by Chrysler. Chrysler wants every dealer to be able to sell and service every Chrysler produced vehicle and some small dealers unable to meet this requirement are being asked to leave the Chrysler family.

Recently, some long-time single Chrysler product dealerships such as a Jeep dealership have begun running new ads announcing that they are now full Chrysler product line dealers. Some smaller dealers whose sales were relatively good are angry that they are not being included in Chrysler's new full dealership plans. However, these operations are simply too small to provide parts and service as well as the full Chrysler line.

These full service Chrysler dealerships have absolutely nothing to do with making partisan donations to the GOP. Yet the story is circulating that for example, Representative Vern Buchanan(R-FL), who owns a Chrysler dealership in Venice, Florida is on the cut-list. However, it is not always noted that he is also a Nissan dealer as well, and Buchanan can certainly continue in business to sell Nissan vehicles which are probably far better Sellers than most Chrysler vehicles right now. Many imported brands of cars have about a 60 day selling supply available at dealers compared to many Chrysler vehicles with far larger supplies of unsold vehicles. As I noted a couple of days ago, some Chrysler cars such as the Crossfire are in 300 day supplies at Chrysler dealers.

And in fact, Buchanan also claims, "I'll going to be fine", in an answer about what he'll do next. But likely that sure isn't going out of business. Buchanan will almost certainly continue as a successful Nissan dealer. Yet the conservative media conspiracy tales continue. Further, there is no way that the White House is involved in deciding how Chrysler restructures it's dealer network. That's an internal decision of Chrysler. There certainly isn't some Obama White House agency sitting around and looking to close down businesses whose owners might lean Republican. That's not the way that either business or the White House operates.

In fact, rather than simply being a full time Chrysler dealer, Buchanan actually operates 23 total car dealerships in Florida and North Carolina. So it becomes a complete myth that he is being forced out of business because with this much assets and an established franchise with Nissan, business will only continue for Buchanan. For a grocer, It would be like if Pepsi decided to cut a dealer for some reason, so he handles Coke products instead. It certainly isn't clear how Buchanan can claim the Obama White House has a single thing to do with this internal Chrysler dealer franchise determination issue, although that certainly hasn't stopped a few over on the right from making a conspiracy tale out of this issue.

So Chrysler decides to close about 25% of it's smallest and sometimes financially troubled dealerships among the 3,200 currently operating. And because some Florida Republican Congressman finds himself on the cut list because he's not even a full time Chrysler dealer, with commitments to selling Nissan vehicles, then the right runs with the conspiracy myths that Obama's killing off Republican businesses.

During the 1950's when Hudson and Nash merged into the newly formed American Motors Corporation some dealers no doubt were faced with the same choice, cease to become a Hudson or Nash dealer, and sell all the models produced by the American Motors Corporation or go out of business. But one Hudson dealer outside of Detroit, Miller Motors Hudson, decided to remain strictly as a Hudson dealer despite the fact that brand ceased to exist in the 1950's and continues to sell and service used Hudson cars to this day without the franchise support of a major existing car company. In a good year, this tiny little dealer might sell around 12 cars. Miller Motors might have even been able to join the Chrysler family after AMC was bought by Chrysler. But they didn't. They intended to be the last outpost for Hudson.

The fact of the matter is that Chrysler isn't looking to have some last outpost dealerships. They want full product line dealerships. And the Obama Administration or White House has nothing to do with which dealerships that Chrysler chooses to continue. There is no politics here. This is strictly a business decision.