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bistet
May. 28th, 2009 06:27 pm (UTC)
Re: regardless of contributions
If the gov't loaned $ to chrysler, then they are just another bondholder, and are now subject to the authority of the bankruptcy court, regardless of mandates conditions of the loan.

And aren't dealerships (private) franchises? Franchises pay money to the corporation, not the other way around. Chrysler's overhead to their franchises is national advertising, which they will pay even if they close a few dealerships. So I don't understand how closing franchises helps the corporation at all.
readherring
May. 29th, 2009 02:23 am (UTC)
Re: regardless of contributions
When I worked at Borders, they opened another Borders ten minutes down the road from us. Our business suffered because we were competing with ourselves. When this happens in the auto industry, this type of competition depresses the price of the vehicles, because there are only so many people in a city that want a PT Cruiser.

There is no hard, set price for what the dealer pays for the manufacturer. They receive special fees, bonuses, and rebates from the manufacturer that allow them to turn a profit on their zany "ONE DOLLAR OVER INVOICE!!" deals.

By having only one dealer in a region, Chrysler can sell about the same amount of cars that they do through multiple dealers, but because the competition is lowered, both the dealer and the manufacturer can afford to charge more.

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