AutoDealers posts
Feed
As we noted yesterday, a lot of auto dealers have decided to pull out of the popular "cash for clunkers" program. This comes as a result of lack of payment by the government, and today General Motors said that it will start to advance dealers the cash that they are due from the government related to the program.Imagine going to buy a Chevy in Akron and not being able to find one. The dealer closed due to low sales and lack of financing.
According to The Wall Street Journal, "The National Automobile Dealers Association estimates 700 new-car dealerships will close this year, up from 430 last year, and taking with them an estimated 37,100 jobs."
So, the government may put as much as $10 billion into a GM (NYSE: GM) buyout of Chrysler which could mean a loss of 60,000 jobs in a consolidation only to find that the new company is having trouble selling cars because it has lost retail outlets.
The car company rescue looks like the mortgage system rescue. The federal government puts a lot of money into large banks in the hopes that it will be loaned out to homeowners. People with houses get almost none of the money and their default rates go up, further damaging bank balance sheets.
If the government is going to save the car industry, it had better save the car dealers. Without them, there is no industry.
Douglas A. McIntyre is an editor at 24/7 Wall St.
| # | Blogger | Posts | Cmts |
|---|---|---|---|
| 1 | Joseph Lazzaro | 115 | 0 |
| 2 | Tom Johansmeyer | 104 | 0 |
| 3 | Steven Mallas | 52 | 0 |
| 4 | Connie Madon | 50 | 0 |
| 5 | Tom Taulli | 45 | 0 |
| 6 | Mark Fightmaster | 37 | 0 |
| 7 | Steven Halpern | 34 | 0 |
| 8 | Trey Thoelcke | 30 | 0 |
| 9 | Paul Foster | 24 | 0 |
| 10 | Brian White | 24 | 0 |
| 11 | Brent Archer | 22 | 0 |
| 12 | Jon Ogg | 22 | 0 |
| 13 | Jim Cramer | 21 | 0 |
| 14 | Melly Alazraki | 21 | 0 |
| 15 | Zac Bissonnette | 20 | 0 |
| 16 | Eric Buscemi | 17 | 0 |
| 17 | Michael Shulman | 13 | 0 |
| 18 | Elizabeth Harrow | 12 | 0 |
| 19 | Sheldon Liber | 10 | 0 |
| 20 | Michael Fowlkes | 10 | 0 |
Find out why more people track their portfolios on AOL Money & Finance then anywhere else.
Five winners of a weak dollar: SBUX, PEP, AAPL
Twitter valuation off by half: NeXt Up Research
Comfort Zone Investing: The unmighty dollar