Over 1200 former GM and Chrysler dealers are taking advantage of a law passed last month to appeal the loss of their franchises taken away in the bankruptcy-induced restructuring of last year; that is good news for car haulers, since more dealers mean more deliveries. That’s also one of the reasons why GM and Chrysler wanted to close the dealers; fewer dealers means lower costs of managing relationships with dealers (including car shipping costs) and less intra-brand competition that will create higher prices for their products.
The new procedure set out by Congress is to have arbitrators look at whether the closed dealerships are viable. However, one of the problems with that approach is that many dealers have already been shut down and/or had brands reassigned to nearby dealers; some of the dealerships may have been viable, but not now after being killed off. About 2700 dealerships are eligible and almost half have opted for the arbitration.
That will create a lot of cost for the auto makers, as they have to spend time and effort defending their original decisions and may have to go through the hassle of helping restart defunct dealerships if an arbitrator rules against them. A win for a dealership will be great news for car transporters in the area, as cars and trucks will have to be moved to the revived dealership and future sales will be spread out between more dealerships; even if the total sales is the same company-wide, there will me more stops and thus more money for the car haulers.
The hearings will be done by July, so we may be seeing a spring of reversals of fortune for some dealers.
Source: http://www.detnews.com/article/20100126/AU...-GM-dealerships
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