Re: How does Closing Dealerships Help Chrysler LLC
Just the other day one of the local (Richmond) radio stations had an interview with the owner of one of the dealerships that is slated to be closed.
There was a lot of information in the interview about how the dealership works, and in summary it is a franchise type of deal.
The dealer pays all of its costs - building, paying its people, it buys the cars from the manufacter, buys the franchise, pays for the local ads. It also leases the Chrysler signs out front from the corporation. In short: keeping the dealership costs Chrysler nothing, in fact they loose money (from the leasing of the signs, franchise fees).
More interesting that that was the given reason for closing the dealerships. This is not Chrysler's idea. The management of Chrysler dosn't seem to support it. (It's not part of the bankruptcy proposals, etc.).
This is being pushed by government. Evidently, they took a look at Toyota and saw that they had less dealerships and said - lets do this too.
