Friday, May 15, 2009

GM & Chrysler to pull the plug on ~2,000 Dealerships

Back in December I posted about how bankruptcy for Chrysler and GM would negatively impact the huge dealer base that both automakers have.

Well just this week, Chrysler announced that 25% of their dealerships (~800 dealers) are being shut-down---and they're sticking those dealers with all their inventory and special tools. And today, General Motors announced that it is going to get rid of ~1,100 dealers by January.

The average dealership has close to 50 employees---but many of the small dealerships are the ones that are closing, so if you assume an average of 20 employees per closed dealership---that means at least 40,000 people are directly going to be laid off by this change and the trickle down impact will be even greater---as many dealerships are the driving force for sales tax revenues in some cities/counties.

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