New car dealerships do not make money selling new cars -1% to +2% (if they are lucky), and haven't for years. New car dealerships make money selling the used car trade-ins and on parts and service. If a new car dealership makes money off of new cars, they make it off of the financing and service contracts.

The auto manufacturers make money selling new cars to new car dealerships. For instance, (I read this in Fortune Magazine 20 years ago), Chrysler Corp makes $10,000 selling a Jeep Grand Cherokee to the dealer - the dealership doesn't see this profit, only the manufacturer.

So will this Obama Automotive scheme work? I don't see it happening. They are taking products away from consumers and making the automotive business less competitive. Why would they close down the Lawrence dealership yet leave Ottawa's open? It doesn't make sense. It must be political.

madameX, Obama is absolutely, 100 percent, in charge of and responsible for the disposition of the second half of the TARP, all of the TALF, the PPIP, the GM and Chrysler bailouts, the Chrysler bankruptcy, every cent spent or wasted on the Stimulus, the supplemental budget, the billions and billions of treasury purchases by the Federal Reserve, and everything that happens from this day forward until he is ousted from office.

Obama can delegate tasks, but he cannot delegate responsibility. He asked for it, he got it.

Hmmmmm...

Taking Starlight's comment a step further, what technology did Chrysler develop over the last several years? The answer is the new hemi powered cars. Good (maybe great) motors but for a different era.

Meanwhile Ford not only has the Fusion hybrid but also the Escape hybrid.

Seems to me Jim Clark Motors might consider doing BMW's.

Also focus on all high mpg VW's.

"Machiavelli_mania (Anonymous) says…

What customers? I have never driven a Chrysler. Never will.

If there were customers for Chrysler, why is the company in dire straits?

I do remember calling them a few years ago and asking what car did they have to show me that could get over 40 mpg. They laughed at me. Hubris is not an acceptable quality in a maladjusted car industry.

Do build a car the public demands. Do not build a car that requires you build public demand for it. It is backwards thinking to thing you can entice a country to buy a car they don't want."

Are you kidding me? Does Ford? Toyota? Chevrolet? Come on, NO ONE has cars that get that kind of mileage. At least no one has cars that are anywhere near safe to drive on the highway that get 40+. Lets be honest here.

The 1960s were a great decade for Chrysler Corp. vehicles. It was the decade of the big engine "muscle cars", of cheap gasoline and uniformly higher highway speed limits (compared to today's). Many, if not most, municipal police departments, sheriff's offices and state highway patrols drove either Dodge or Plymouth patrol cars, and some of those patrol cars were really something to behold. (Before the advent of the helicopter air ambulance, how many of us remember those emergency "blood runs" KHP troopers would frequently make between Topeka and Wichita, smoking down the Kansas Turnpike at 140 mph? Those were the days.)

I think the real tipping point for the Chrysler Corp. was its stubborn resistance to designing and manufacturing fuel-efficient cars following the 1973 Arab Oil Embargo. Not that Ford and GM were any less resistant; it's that Chrysler persisted a couple of years longer in making powerful, fuel-hungry cars that were being increasingly shunned by American consumers due to the higher cost of fuel.

It was at this juncture that Japanese carmakers Toyota, Datsun (now Nissan) and Subaru exploited the attractiveness of their tiny, high-mileage vehicles by committing major resources to improving their design and reliability. That commitment resulted in a host of Japanese vehicles becoming the standard in quality, reliability, durability and fuel economy.

It will be really cool if Chrysler Corp. emerges from bankruptcy once again a world leader in making excellent vehicles, and with Jim Clark again selling and servicing them.

Well, the Jim Clark dealership must be doing something right to stay in business for 53 years. I believe they are the oldest dealership in Lawrence.

As for making cars that people want, Chrysler still makes the popular Jeep (but avoid the Compass!) and Dodge trucks. The rest of their line-up pretty much sucks but I put a lot of the blame on the failed merger between Chrysler and Daimler-Benz. The company really went downhill as soon as that happened. Management by committee never works.

A lot of Chrysler technology is archaic compared to Ford and GM. The Viper is a brute, while the Corvette can get similar performance with outstanding fuel economy. The six cylinder engines that Dodge uses in the Dakota get terrible fuel economy and poor performance - I know, I had a 2002. And the transmission was laughable, really rough kick-down going up hills. The truck sure was purty though.

As for Fiat...what a joke. Does anyone seriously think Fiat can save Chrysler? There is a reason Fiat left the US...they are crap cars.

xbusguy (Anonymous) says…

Oldenuf- In my opinion, it has nothing do with the local dealer. If Chrysler built cars that most people wanted, then the local guy would still be selling Chrysler products. I blame the Unions.

Oh, right, because it's the unions who decide what kind of cars a company is going to make. I'm sure you do blame the unions, I'm pretty sure I know why, and I'm also pretty sure I disagree, but from this statement it sounds like you're blaming them for something they have zero control over.

Prior to Obamalaw, dating back to the founding of this nation, bondholders have been senior to all other creditors in a bankruptcy.

Now, it is all up for grabs. Now Obama picks the winners and the losers. Contract law is just another one of those "failed ideologies of the past."

http://www2.ljworld.com/news/2009/may/14/customers-would-be-biggest-losers-if-jim-clark-shu/#c892684

Fiat is not expected to pay a dime for its stake in Chrysler.

"Under the new deal Fiat is expected take a 20 percent stake in Chrysler, down from the original offer of 35 percent, according to a person familiar with the plan. If the Italian automaker meets certain milestones, it could gain a larger stake.

In exchange, Chrysler would gain Fiat's technology and global distribution network."

""Fiat, meanwhile, is not in the best financial shape. Standard & Poor's recently downgraded the Italian automaker's debt rating. The credit rating agency said that Fiat may not have enough cash and lines of credit to cover all of its obligations over the next year.

Fiat has refused to take on more debt as part of any deal, and it found itself in a public spat over the issue last month after Chrysler's chief executive Robert L. Nardelli said Fiat would assume 35 percent of its debt to the U.S. government. Fiat shot back that it "intends to make it absolutely clear that the proposed alliance will not entail the assumption of any current or future indebtedness of Chrysler." Chrysler eventually acknowledged that Nardelli was mistaken. "

http://www.washingtonpost.com/wp-dyn/content/article/2009/04/03/AR2009040303466.html

If Fiat has no cash, and refuses to take on more debt, then exactly how much is Fiat paying for its 20% stake in Chrysler? And what are the certain "milestones" it must meet to gain that 35% stake? Are the milestones in the form of payments, or are they in the form of political payback?

@Godot:

The first problem with your statement is that employees actually get paid ahead of lenders in pretty much any bankruptcy situation (and they certainly don't get paid last). Also, Fiat is getting preferential treatment because they are looking to purchase Chrysler, or at least pieces of it, and keep those pieces going.

But hey, just keep commenting without doing any research on your own. You'll still be as smart as the rest of the internets.

what little business i have done with jim clark has been more than satisfacotry

i am sure like any large corp that sells thru dealers, 80% of the business comes from 20% of the dealerships. i suspect jim clark sells more than 100 cars per year so i dont know what got them them on the list

like doing business with so many people in lawrence, particulary the whiners. you cannot afford to do business with some folks at any price

Hey Junior:

I hate to burst your bubble, but your service department is terrible. I gave up on your shop long ago, and now use DAS autohaus exclusively, as they understand the term excellent service. I'm sorry for the future impact to you and your staff, but your service department is one of the worst I've ever experienced.

First the bond holders, who legally have first priority, are being put in line behind the unions who, by law, should be last in line, while and the taxpayers, the lenders, are being put at the end of the line behind the unions and the bondholders, and now the dealers, are being shafted by Obama to favor the Unions and, for some unknown motivation, the Italian corporation Fiat.

Why is this happening?????????????????????????

Is this a perfect Dada scenario? Is Boog happy now?

What customers? I have never driven a Chrysler. Never will.

If there were customers for Chrysler, why is the company in dire straits?

I do remember calling them a few years ago and asking what car did they have to show me that could get over 40 mpg. They laughed at me. Hubris is not an acceptable quality in a maladjusted car industry.

Do build a car the public demands. Do not build a car that requires you build public demand for it. It is backwards thinking to thing you can entice a country to buy a car they don't want.