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Archive for Monday, May 18, 2009

Lawrence Chevrolet dealer may not make GM’s cut

May 18, 2009

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GM might not retain Crown Automotive

A Lawrence auto dealer is hoping for an economic turnaround. Enlarge video

Turns out Crown Automotive received a letter last week from General Motors, notifying the Lawrence dealership that it shouldn’t expect to be selling Chevrolets past October 2010.

But Dale Backs continues holding out hopes for a turnaround.

“In the car business, that’s a long time,” said Backs, general manager for Crown Automotive, which also sells Toyotas along South Iowa Street.

Just this past Friday, Backs was characterizing the written communication — received Friday by FedEx — as “not a termination letter,” and one that would leave “the door open for some good news, hopefully.”

But GM officials said that the only letters that went out Friday — to owners of 1,100 or so dealerships — were notifications of plans to let their dealer sales agreements with GM expire.

Dealers can continue selling GM vehicles through October 2010, or otherwise make arrangements to end their GM businesses earlier, either by working with GM to perhaps buy back inventory or making pacts with other dealers chosen to be kept on.

“They should not expect their contracts to continue,” said Susan Garontakos, a GM spokeswoman who handles dealer communications. “They’ll terminate at the end of the current contract. They will expire.”

She acknowledged that while an economic turnaround could arrive, the letters are clear communications of the automaker’s intentions.

“You never know,” Garontakos said Monday. “The economy turns around, who knows? But today, that’s the reality.”

Dale Willey, owner of Dale Willey Automotive, is among those rooting for a turnaround, too. He sells other GM vehicles — Buick, Cadillac, GMC and Pontiac — at 2840 Iowa, and doesn’t like the idea of the government driving decisions about which dealerships remain open or must close.

But he expects GM to seek bankruptcy protection by June 1, the government-imposed deadline for coming up with a viable reorganization plan.

While Willey has not received a letter from GM — a development he described Friday as “great news” — he’s worried about what might happen in bankruptcy court, where a judge could deem dealership agreements null and void.

“Anything can happen,” Willey said. “There’s no planning for it, I’ll tell you that.”

Two years ago, Willey acquired two GM dealerships in Warrensburg, Mo. — one selling Pontiacs and GMCs, the other offering Buicks and Chevrolets — and merged them into a single dealership.

“I would assume that’s what (GM officials) are after in other points,” Willey said.

Willey declined to speculate on what might happen in Lawrence if Crown were to stop selling Chevrolets.

Just last year, Willey completed an expansion of his dealership to accommodate a larger used-car business.

GM has announced plans to drop its Pontiac brand at the end of next year.

Comments

Godot 4 years, 11 months ago

"Letter from a Dodge dealer letter to the editor

My name is George C. Joseph. I am the sole owner of Sunshine Dodge-Isuzu, a family owned and operated business in Melbourne, Florida. My family bought and paid for this automobile franchise 35 years ago in 1974. I am the second generation to manage this business.

We currently employ 50+ people and before the economic slowdown we employed over 70 local people. We are active in the community and the local chamber of commerce. We deal with several dozen local vendors on a day to day basis and many more during a month. All depend on our business for part of their livelihood. We are financially strong with great respect in the market place and community. We have strong local presence and stability.

I work every day the store is open, nine to ten hours a day. I know most of our customers and all our employees. Sunshine Dodge is my life.

On Thursday, May 14, 2009 I was notified that my Dodge franchise, that we purchased, will be taken away from my family on June 9, 2009 without compensation and given to another dealer at no cost to them. My new vehicle inventory consists of 125 vehicles with a financed balance of 3 million dollars. This inventory becomes impossible to sell with no factory incentives beyond June 9, 2009. Without the Dodge franchise we can no longer sell a new Dodge as "new," nor will we be able to do any warranty service work. Additionally, my Dodge parts inventory, (approximately $300,000.) is virtually worthless without the ability to perform warranty service. There is no offer from Chrysler to buy back the vehicles or parts inventory.

Our facility was recently totally renovated at Chrysler's insistence, incurring a multi-million dollar debt in the form of a mortgage at Sun Trust Bank.

HOW IN THE UNITED STATES OF AMERICA CAN THIS HAPPEN?

THIS IS A PRIVATE BUSINESS NOT A GOVERNMENT ENTITY

This is beyond imagination! My business is being stolen from me through NO FAULT OF OUR OWN. We did NOTHING wrong.

This atrocity will most likely force my family into bankruptcy. This will also cause our 50+ employees to be unemployed. How will they provide for their families? This is a total economic disaster.

HOW CAN THIS HAPPEN IN A FREE MARKET ECONOMY IN THE UNITED STATES OF AMERICA?

I beseech your help, and look forward to your reply. Thank you.

Sincerely,

George C. Joseph President & Owner Sunshine Dodge-Isuzu"

George, you make more than $250,000 per year, right? Did you make a sizeable donation to either Obama, or Acorn or the Democrat National Socialist Committee? If you did not, do not question why you are being punished for your success. It is The Way of The One.

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Godot 4 years, 11 months ago

Obama is the one who bailed them out, knowing that it would not be enough to keep them from going bankrupt. It was a callous waste of taxpayer dollars to gain control over Chrysler and GM so they could be turned over to the unions and government. Had GM and Chrysler been allowed to go bankrupt in January, billions and billions of taxpayer dollars would not have gone "under the bus."

This is such blatant theft, it amazes me that people are not converging on Washington demanding that it stop.

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Richard Heckler 4 years, 11 months ago

Can government manage any worse than over paid white collar CEO's? and their BOD's?

Perhaps taxpayers would be better off to say let it go under? Probably Nissan,Toyota,Ford and Subaru would expand and take up some slack as far as jobs go.

So much of the work is outsourced.

I would rather the government nationalize the energy industry because everyone needs energy. Everyone does not need a Chevy,Buick,Cadillac or GMC truck.

Maybe the gov't is more interested in GM's part of the war machine?

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Godot 4 years, 11 months ago

Many posters on this board attacked me, personally, months ago when I warned that Obama would take over the automobile industry and turn it over to the Unions as payback for their support.

This is one time I am not all that pleased to say, "I told you so."

http://www.cnbc.com/id/30829896

I recall that the agreement to lend the $15,000,000,000 to GM included the protection of the taxpayers, that they would be first in line to be repaid if GM went BK. Obama has now thrown us under the national bus. He has decided that GM does not have to pay us back. Ain't that sweet?

This is a tough blow for Crown, but maybe some day they will look back on this and say, "I'm glad it happened. At least now we don't have to deal with Government Motors."

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ilikestuff 4 years, 11 months ago

Maybe it's karma...

Once I bought a brand new Chevy at Crown and it had a bunch of problems. The rationale went something like this, since none of the problems could be obviously attributed to a manufacturers defect my car didn't qualify as a lemon thus they refused to do anything helpful at all.

The Crown people were jerks to deal with as were the GM people. Perhaps had they treated their customers better they'd have better sales and wouldn't be facing their current dilemma.

Grandpa (Abe) Simpson: "My car gets forty rods to the hogshead and that's the way I like it"

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Richard Heckler 4 years, 11 months ago

We owned a Mazda MPV and loved it. Then it would not start for some unknown reason. Laird Noller would make a guess and just kept replacing parts,for no apparent reason,which changed nothing. Laird Noller supported adding parts for no apparent reason. Bear in mind the local shops kept sending us back to Laird Noller

When the local dealer cannot determine WHY and cannot fix THEIR cars it was bye bye Mazda. The MPV was a great road vehicle with an outstanding turning radius.

We returned to Toyota and have not looked back. WE did encounter a mystery problem not not long ago. Crown thought they had fixed it but no. However we only paid once and they stuck with us, after numerous visits, to the point of calling factory reps into Lawrence twice. The second time was the charm. It was not a problem Toyota had ever encountered.

The car would randomly decide not to accept gasoline and would come shooting out as it was attempting to fill it up. Crown had the tank assembly off many times at no extra cost to us. Toyota was picking up the cost for several months.

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buytoyota 4 years, 11 months ago

none2...

If you need a vehicle that will pull a horse trailer, a camper or a boat, I would suggest a Toyota Tundra. It is made in Texas using non-union labor. American built, superior quality and better resale value!!

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George_Braziller 4 years, 11 months ago

Mazda's maintained their values until Ford bought controlling interest and then just turned them into a crappy Ford.

I LOVED my first Mazda pickup and never had a problem with it until it was totaled by a guy driving a stolen vehicle when mine was parked on the street in front of my house.

My second Mazda, after Ford took over, has been a royal pain in the ass.

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none2 4 years, 11 months ago

WHY (Anonymous) says…

Too bad all Chrysler and GM dealers are going out of business, now everyone will be forced to buy well made honda and toyotas that maintain their value and last more than 10 years. What a shame.

I bought a three year old Buick years ago and kept it for 17 years. I currently have two Dodge minivans that are 14 years old.

Are you a sales person for Japanese, Inc?

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WHY 4 years, 11 months ago

Too bad all Chrysler and GM dealers are going out of business, now everyone will be forced to buy well made honda and toyotas that maintain their value and last more than 10 years. What a shame.

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Keith 4 years, 11 months ago

If people work out of town, maybe they are also buying cars out of town. Hazard of being a bedroom community?

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deskboy04 4 years, 11 months ago

Why is it Obama's fault? The auto companies are broke. That's not his fault.

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otto 4 years, 11 months ago

those were just average comments - I live here, work here, pay taxes here, went to school here. Dale Willeys parts dept sucks and you will have to go out of town to buy gm parts or suffer the agonizing pain of dealing with morons.

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timetospeakup 4 years, 11 months ago

What the heck editors - why was my posting earlier removed? These guys did lie to me, I had it verified by another dealer, and you pulled my comment for sharing that?

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Richard Heckler 4 years, 11 months ago

By Chelsea Emery and Tom Hals

NEW YORK, May 19 (Reuters) - General Motors Corp's (GM.N) plan for a bankruptcy filing involves a quick sale of the company's healthy assets to a new company initially owned by the U.S. government, a source familiar with the situation said on Tuesday.

http://www.reuters.com/article/mergersNews/idUSN1943363120090519

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justaverage 4 years, 11 months ago

Many of the people posting on this thread don't know WTF they are talking about! The bottom line is that if we continue to lose businesses and jobs locally we will suffer as a community in the future. If so many of you people don't work here, don't shop here, don't seem to care what happens here, then why do you live here? In typical Lawrencian know-it-all fashion, I'm amazed at how many business, financial and automotive industry experts post their stupid comments here!

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Stacy Napier 4 years, 11 months ago

Don't worry,

Obama will fix it all! He just needs more time.

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Agnostick 4 years, 11 months ago

none2 (Anonymous) says…

feeble (Anonymous) says… “… A Honda Civic starts out around $15,500 and gets 26 city / 34 highway.

This is why Chrysler is failing. Their products are not competitive.”

"Will that Honda Civic pull a large horse trailer or a camper or a boat?"


And what does that have to do with anything?

Read again: feeble was comparing a Chryslter PT Cruiser to a Honda Civic, which is a pretty even comparison. I wouldn't expect the Cruiser to have any more or less "pulling power" than the Civic.

Here's a better source for comparative research:

http://www.fueleconomy.gov/feg/bymake/bymanuNF.shtml

Fuel efficiency is just one factor, though: Insurance rates, crash tests, overall reliability, features, comfort. All of those things should factor into a logical purchase.

Agnostick agnostick@excite.com

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Richard Heckler 4 years, 11 months ago

Face it Lawrence simply is not this hot retail market in spite of what the chamber,developers and their reps on the city commission keep saying. And saturated markets are not appealing to any retailers.

My guess the two dealers on the chopping block were not selling tons of vehicles.

It's no secret that more often than not driving to KCMO metro can save a buyer $500 - $2000 at least. That's worth the drive.

Plus corporate america figures if they saturate the media with advertising americans can be sold anything no matter what even crummy built USA cars made in China and Mexico. Why should americans support Chinese and Mexican governments by purchasing former USA made products?

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none2 4 years, 11 months ago

feeble (Anonymous) says… "... A Honda Civic starts out around $15,500 and gets 26 city / 34 highway.

This is why Chrysler is failing. Their products are not competitive."

Will that Honda Civic pull a large horse trailer or a camper or a boat?

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otto 4 years, 11 months ago

Dale Willey's parts dept. sucks.

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feeble 4 years, 11 months ago

bronze (Anonymous) said:

the successful PT Cruiser for example all along should have had a better and more fuel efficient engine, yet another example of Detroit/USINC management.

more efficient than what, a hummer? According to the specs provided by Chrysler on chrysler.com, the most efficient 2009 model gets 21 city / 26 highway and starts out at around $18,700.

A Honda Civic starts out around $15,500 and gets 26 city / 34 highway.

This is why Chrysler is failing. Their products are not competitive.

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bronze 4 years, 11 months ago

excellent comment Brutus......

the successful PT Cruiser for example all along should have had a better and more fuel efficient engine, yet another example of Detroit/USINC management.

brutus53 (Anonymous) says… I don't think closing up dealerships is a liberal issue- it's an economic issue that liberals have to deal with right now.

We've had better service for our GM cars at Crown than at Dale Willey. So we're obviously very disappointed that Crown is getting cut off instead of Dale Willey.

We will not go out of town to buy a car. GM closes Crown, than we no longer buy a Chevrolet. With Jim Clark closing, we also will not be buying a Chrysler.

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bronze 4 years, 11 months ago

Keith (Anonymous) says… lawrenceguy40 probably thinks the weather report is the liberal's fault too.

here here Keith!

an ill-advised 'war on terrorism' with what results exactly?, Enron CEO in the White House, proposals to privatize social security into wall street, ABM missle defense in Poland at $58 billion for 2007 alone, and people like /lawrenceguy blame Obama for the economy?

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oneeye_wilbur 4 years, 11 months ago

i'll just wait and go to Cuba and get me a real Chevy, one of those classic cars on the streets of downtown Havana.

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sourpuss 4 years, 11 months ago

Thank you, thefisherman. I'm tired of people complaining that basically everyone in the world is overpaid (except them, of course). Any economy should run at the sweet-spot, where wages are high enough so we can all afford to buy the things we need and some of the things we want, but not so high that business cannot make a profit. Our economy is in the current situation in large part to huge sums of money being siphoned into the hands of the few. I accept that a CEO or President of a company has a hard job, lots of responsibilities, and should be paid accordingly. Is the CEO's job 10,000x harder than a salesman? No way. No one, and I repeat, NO ONE deserves a -salary- of tens of millions of dollars. You don't need bonuses, stock options, or any of it. Why in the world do you, as one human, think you are worth that much? And it isn't just that you get that money, you deprive others of it as well. So until we embrace "fair pay for fair work" (and this includes paying men and women the same) then this will just happen again.

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LogicMan 4 years, 11 months ago

"Just last year, Willey completed an expansion of his dealership to accommodate a larger used-car business."

Thinking about it some more, if we want to keep Chevy in town it must move to Willey. Then move all Willey's and Crown Toyota's used cars to the current Chevy site. I hope the two can work together on this so that a solid plan can be presented to GM. LMK if you need an independent intermediary! I could use a nice truck. :-)

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50YearResident 4 years, 11 months ago

"Two years ago, Willey acquired two GM dealerships in Warrensburg, Mo. — one selling Pontiacs and GMCs, the other offering Buicks and Chevrolets — and merged them into a single dealership"

Did I see where Warrensburg was one of the dealerships being closed? (from a previous J/W story) Or was that another location?

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timetospeakup 4 years, 11 months ago

This comment was removed by the site staff for violation of the usage agreement.

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brutus53 4 years, 11 months ago

I don't think closing up dealerships is a liberal issue- it's an economic issue that liberals have to deal with right now.

We've had better service for our GM cars at Crown than at Dale Willey. So we're obviously very disappointed that Crown is getting cut off instead of Dale Willey.

We will not go out of town to buy a car. GM closes Crown, than we no longer buy a Chevrolet. With Jim Clark closing, we also will not be buying a Chrysler.

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thefisherman 4 years, 11 months ago

nut_case (Anonymous) says…

"One way to sell more would be to lower the price, cut commissions and pass the best possible deal on to the customer. That doesn't really seem to be happening, so I guess it is survival of the fittest."

nut_case, you seem like one of those people that would want everything both ways. You want the best price possible, but would you whine when there is nobody there to take you on a test drive, explain the features, and answer your questions? Customer service comes at a price. The fact of the matter is that the salespeople are there to make a living. The overwhelming majority of salespeople I know are not out to rip anybody off. They want to make an honest living doing something they know and enjoy.

In a commission based structure, nobody wants to help you if they know you are going to be a pain in the rear, demand everything plus the moon, and do it for what essentially turns out to be no pay to the sales person. Ultimately you wind up with a store like Carmax. The customer service stinks, you take a number and wait your turn, only to be helped by a person who generally doesn't know much about the product and probably won't care about you after the sale when something goes wrong.

As soon as buyers are willing to buy a car without asking detailed questions, going on a test drive, or having somebody to call after the fact with a question about how to open the gas filler door, dealerships will be able to cut back on commissions and sales staff. Until then, you can be the person who wastes 2-3 weekends visiting 6 dealers looking for the "best price" and coming out exhausted and still wondering if you could have done better.

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nut_case 4 years, 11 months ago

roggy (Anonymous) says…

BIgPrune, FYI - Banks do have to pay back the TARP money.

Yeah, I wonder where car co's and banks are going to get the money to pay back the loans? Higher interest rates, more fees, higher prices.

It's an incredible time we live in where the government steals taxpayer money to support bad businesses, then if those businesses do happen to survive, they are going to charge the taxpayer more so they can pay off their debit.

I don't really see the government sending me a check for all the money they loaned out on my behalf plus interest, do you?

As for the dealer going out of business, sorry to hear that, but I wonder what the criteria are for closure...not selling enough cars? One way to sell more would be to lower the price, cut commissions and pass the best possible deal on to the customer. That doesn't really seem to be happening, so I guess it is survival of the fittest.

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professor 4 years, 11 months ago

From the Federal Lexicon: stimulus - an act by which you take money from us, we tell you how to run your business. Net result 1,800 private businesses closed (dealerships) 187,000 workers out of a job, but wait, we're hiring 66,000 people to count how many people don't have a job in next year's census. Obamanomics: two plus two equals five!

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Keith 4 years, 11 months ago

lawrenceguy40 probably thinks the weather report is the liberal's fault too.

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roggy 4 years, 11 months ago

BIgPrune, FYI - Banks do have to pay back the TARP money.

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gl0ck0wn3r 4 years, 11 months ago

"jkealing (Jonathan Kealing) says…So there will be a net loss to Lawrence."

That seems to be a growing trend - apparently the only thing growing in Lawrence since the anti-growth, pro-tax vocal "grass roots" minority turned the city into a lab for their expensive pet projects.

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LogicMan 4 years, 11 months ago

That's very unfortunate ... to likely be losing another dealer.

When life gives you lemons, make lemonade. Sell the site to Wal-Mart for a premium, or open a CarMax store using, among others, the trade-ins from Crown Toyota.

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lawrenceguy40 4 years, 11 months ago

It looks like the liberal voters will have to pay a price for being foolish with their votes.

Remember folks, your vote does count. And we are all about to pay the price!

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monkeyspunk 4 years, 11 months ago

Let's see...two GM dealerships.

One has the a previous president of NADA and DOESN'T sell a competing product.

Dale Willey staying and Crown dying was pretty easy to call...

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Jonathan Kealing 4 years, 11 months ago

I've been corrected. The way auto sales tax works, the purchaser, if in-state, pays local sales tax and then pays to Douglas County the difference in local sales tax here and sales tax there. For instance, (from the state):

When the consumer registers the vehicle with the County Treasurer, the consumer will owe to the County Treasurer as local use tax the difference between the Manhattan local sales tax rate and the Junction City local sales tax rate (2.25% Junction City rate less 2% Manhattan rate equals .25%) on the purchase price.

So there will be a net loss to Lawrence.

Jonathan Kealing Online editor

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Richard Heckler 4 years, 11 months ago

Too many dealer ships = too much competition for the same regional market?

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VAMA 4 years, 11 months ago

I have been wondering though... How do manufacturers lose money by having "too many" dealerships?

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VAMA 4 years, 11 months ago

Well, it's a bit early to say Chrysler's loan will be written off by a federal judge. The company is going through restructuring via bankruptcy which in no way guarantees the loan will be forgiven. And as far as banks are concerned, the government received some sort of compensation (mostly just grossly overvalued bad investments). It wasn't all "free" money.

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Beth Bird 4 years, 11 months ago

I bought my GMC at Crown and had an excellent experience. I get all of my service done there. It would a loss to our community.

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RogueThrill 4 years, 11 months ago

Chrysler won't be paying it back. And if GM goes into bankruptcy like Chrysler it won't be either.

So they are loans they will default on but ideally would have been required to pay back. It's just a matter of semantics, you might as well lump them together (especially after June 1).

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BigPrune 4 years, 11 months ago

The bailout for the auto manufacturers were loans they have to pay back. The bailout for the banks was free money that doesn't have to be reimbursed.

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Steve Jacob 4 years, 11 months ago

I think the $4 gas last year was the final nail in the coffin.

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Norma Jeane Baker 4 years, 11 months ago

Thanks, Jonathan. I didn't know that about sales tax on cars. But, you're right, there will be other losses as well, jobs not withstanding.

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gccs14r 4 years, 11 months ago

Yes, vehicle taxes are collected based on the buyer's address, not on the location of the dealership. That's to prevent sales tax shopping. MO doesn't collect the KS tax, they leave it up to the tag office to do that.

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Boston_Corbett 4 years, 11 months ago

"[Wiley] doesn’t like the idea of the government driving decisions about which dealerships remain open or must close..."


Uhhh. I don't think that is what happened.

But it must be fun to blame the government for everything, as government gives the manufacturers billions of our money to bail them out.

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Jonathan Kealing 4 years, 11 months ago

Informed, I think Kansas is one of the states where where you buy the car doesn't matter for sales tax. It's where you title it. So Lawrence shouldn't lose out if dealers shut down, at least from sales tax collections. There will be many other losses though.

Jonathan Kealing Online editor

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Norma Jeane Baker 4 years, 11 months ago

As more car dealerships here in Lawrence lose brand specific franchises, sales tax dollars will continue to leave the county. Oh well, I rarely shop here anyway.

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gccs14r 4 years, 11 months ago

Sounds like Dale Willey would be a good candidate to pick up a Chevrolet franchise in exchange for the now-defunct Pontiac one, assuming one is offered and they want it. Crown spent a bunch of money spiffing up the Toyota side of things, but didn't do much on the Chevrolet side, so I'm not surprised that they got the axe. Besides, there's always Superior, which bothers to have its parts counter open on Saturdays.

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