Tuesday Weisblog: Grand theft auto dealership

auto-bailoutI’ve worked for two separate publishing companies that, as a major source of income, produced newsletters for auto dealerships across the country.

As the years went by, the number of clients became smaller and smaller as dealerships thought they could cut some of their advertising budgets to save money. That’s a bad move, but that’s another story for another day.

The bottom line is, everywhere you look troubles are worse than ever in the automotive industry. According to the National Auto Dealers Association (NADA), 1,200 dealerships will close this year. Combine them with the 760 that closed last year, and you can see just how fast the bottom has fallen out.

General Motors and Chrysler may soon go bankrupt if they don’t get an infusion of cash, and GM just lost their CEO, Rick Wagoner. In addition, they’ll announce soon whether or not they’re phasing out the Hummer brand. (The decision was supposed to come today – Tuesday – but it’s been delayed in hopes of finding a buyer … so if you’re interested, it’s not too late.)

Dealerships are in deep trouble.. Automakers are being more than gently persuaded to get rid of them. In addition, profits are smaller and there are fewer customers – and those who do show up are having a more difficult time getting financing.

At first glance, you might think the closing of auto dealerships is just a “survival of the fittest” thing, and that it’s no big deal. But upon closer examination, the trickle-down effect will take its toll. Not only will the dealership employees be out of work, but the dealership has vendors (like publishing companies … lol) and does business with a host of local companies for various reasons. These companies then lose a percentage of their business, and so do their vendors, and so on and so forth.

When you look at it that way, the consequences are tremendous.


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