Two of the largest automakers in America history are finally going down the Chapter 11 road, sadly with full government involvement & a dark future ahead for them, they should have done this independently half-a-year ago, but they let their small time table drift away, and they were beggars at the feet of the largest enablers in the world.
One company is being gutted & sold to the highest bidder, the other is becoming the official pet of the federal government under Chairman Obama, both have screwed the legally first-in-line bondholders, to the point of an appeal to the Supreme Court.
There is also another interesting twist in this drama worthy of a soap box time slot, both of these automakers gutted hundreds of car dealerships across America, possibly making the largest business fallacy in American business history. A few facts should some the dealership fallacy up quickly :
Fact #1 : These automakers do not own these car dealerships, they own the namesake of all of these car dealerships, these dealerships are independently owned by Joe taxpayers across the United States, such as McDonald's or Subway franchises are.
Fact #2 : If these car dealerships fail, no cost comes to the automakers - as the cars the dealerships bought, and the parts for auto repairs are already paid for.
Fact #3 : Profit only comes from dealerships, and to shut down even one is a massive mistake - that even a second grader could explain.
Fact #4 : When coming out of Chapter 11, you want as many franchises as possible selling your product, and by gutting hundreds of them across the Nation - where will people buy the product?
While I am intrigued at the circumstance of Republican dealerships being shutdown - opposed to Democrat dealerships, I am more concerned with the actual economics of these dealership shutdowns at the time, politics should have no role in this debate.
I conclude the following :
1.Car dealerships = more money, more products available to consumers, and smart business for all involved.
2. Shutting down dealerships = less money, less products available to already annoyed consumers, and miserable business for all included - especially the car dealerships owners & employees.
3. No right thinking CEO or other economic advisers of any private company would do any of these actions when it comes to the dealerships, I suspect a trigger at the head - with a gun owned by the federal government, with blanks in the chamber.
We have all been duped.
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