Let’s suppose that there are such things as ’widgets,’ and that everyone has one, and maybe even two or three. While they’re not necessary to sustain life, they certainly do make life pleasanter. Let’s assume that widgets are made all around the world in different brands, sizes, and price categories. With the current depression, widget sales are certainly down. People are making their old widgets last longer and postponing buying new ones, because they really do last a long time with careful care.
The widget business is so bad of late, that a couple of widget manufacturers are in trouble, and have had to eat at the public trough of late, with the promise of paying it back of course. Since widgets are sold everywhere, and since sales are what keeps the factories humming and people employed, what should the widget manufacturers do? Should they lay off workers, close factories, renege on pension plans, go bankrupt, or maybe close their sales outlets? Do more advertising, bring out new widgets, or stop making certain sizes?
Obviously, I am talking about the auto industry, which seems to have the brainpower of politicians in D.C. All of the above except one makes sense to a degree, except one. The thing which makes no sense at all, is closing dealerships. Now, if auto sales are down, how does closing dealerships and breaking franchise agreements, make any sense at all? How in the name of heaven, does reducing sales, make sense? Unless the D.C. Gang is involved of course.
Do auto dealerships cost GM and Chrysler anything? After all, don’t car dealerships own their own land, buildings, and tools? Don’t they pay for their own signs and parts to repair vehicles? Don’t they pay salaries to sales persons, mechanics, bookkeepers, and executives? Does Chrysler or GM buy the signs, buildings, or land for a dealership? No! If dealerships are taken away, it is estimated that 40,000 more will be unemployed as a result, plus additional bankruptcies and bank foreclosures, how does this ’help’ GM or Chrysler? If there are fewer dealerships, isn’t it obvious that there will be less sales of cars from the already over-stocked lots of Chrysler and GM?
If a dealership is closed in a town of 10,000, will those 10,000 go to a city of 50,000, maybe 50 miles away to buy a new car, or might they buy some other brand which is in their town, such as Ford, or maybe a good used car? If a dealership is closed in a town of 10,000, that dealership may have 50 employees which will be out of work, go on relief, go bankrupt and lose their home and life’s savings. Fifty less salaries to spend in that town of 10,000. Mightn’t that dealership may have a line of credit or a mortgage with a bank in that town, which will go into default? Will those 50 less salaries cause a restaurant to close, or a hardware store to go broke?
I am certainly not in the auto business, but I am a damned good economist, and have gobs of common sense. The more I think about the boobs at GM and Chrysler closing dealerships and betraying the trust which exists, if not a firm contract, the more confused I become. Isn’t it a sort of ironclad rule of business, that if you want to prosper, you sell more? If sales are down, is it wise to close sales outlets and betray those who have worked with you and suffered for and with you for decades? It seems to me that unless I miss something which seems pretty obvious to everyone but me…taking franchises away from those who sell for you, to ’help your economic situation,’ does the exact opposite.
’But wait, there’s more,’ to imitate a sales pitch on TV. Who owns most of Chrysler and GM, thanks to the tens of billions of bailouts? The US Government? Doesn’t closing dealerships and therefore selling far fewer cars, sound like a government plan for recovery? Isn’t that just about what one would expect from Washington? Ford didn’t take a penny from the D.C. Gang, and has not announced a single dealership closure. Maybe GM and Chrysler don’t want to close dealerships, but are being forced to do so by the ’auto task force.’ Ford will have all its dealerships intact and Chrysler and GM will not. Guess who will survive? Guess who will sell the most cars? Guess who will keep the fickle fingers of government off their pie?
Now we will have a super liberal, Hispanic, female, Supreme Court judge who grew up in a public housing project in the South Bronx? I admire someone who does well and works their way up from poverty, but how can such a liberal person, not side with welfare, non-working, ’oppressed,’ and minority people, programs, and cases, and not ignore the Constitution which doesn’t concern itself with these things? If all the ’gay marriage’ rulings had been voted upon, rather than being ruled upon by liberal judges, would there be any at all? We’re losing our freedoms, money, and individuality. All you Obama voters happy?