Monday, June 8, 2009

Auto Dealership Thought

"Peter J. Walsh, the owner of Walsh Dodge in Jersey City, N.J., started out selling used cars in his hometown 28 years ago after the birth of his daughter. He slowly built his business, and felt as if he'd finally made it when he earned his Chrysler shingle in 2000. But on Tuesday, Walsh Dodge will lose that shingle — as will 788 other dealers across the country... Chrysler has asked a bankruptcy court for permission to terminate the franchise agreements of about 25 percent of its dealers." from the AP Morning Brief

It occurs to me that Mr Walsh and many others have their entire careers wrapped up in the business of selling cars. He has worked hard to develop a following of devoted employees and customers.

Weather right or wrong, his contract with Chrysler is being dissolved by government decree. Being free from those bonds, he no longer has that business and no ties with any particular auto manufacturer.

He is now free to pursue the business he loves and prospers in, selling cars, if he so chooses. It seems to me that he is free to begin offering Honda's, Toyota's, Suzuki's, Hundai's, Nissan's and a myriad of high quality, popular, less encumbered, products.

The effect is that the courts have turned Chrysler's most powerful assets into their most fierce competitors.

That's how I'll be placing my trades.

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