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Old 06-29-2009, 05:56 PM   #1
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Chicago Tribune: Don't pin the blame on GM for dealer's greed

Quote:
AUTO LETTERS BY JIM MATEJA


June 28, 2009


Question:

In November, I was promised a price on a new Camaro at $500 below invoice, and I would be in the dealer's third allotment of vehicles. I called about my vehicle last week and was told my order couldn't be placed because they were selling cars only for well over sticker. The dealer has three Camaros and each is listed at $15,000 over sticker. I think I know why GM is going out of business.

A.B., Chicago





Answer:

Here's a few things you don't know. General Motors sells cars to dealers, not, repeat, not, to consumers. The dealer is the factory's customer. If the dealer is adding a premium over sticker, he's the one playing games, not GM. That $15,000 goes right in his pocket.

And GM can't turn the dealer over its knee and spank him without violating federal and state franchise laws.

Likewise, GM can not tell the dealer what to sell a car for because that would be price fixing, another federal offense.


So your episode isn't why GM is going out of business, but a story of a greedy dealer, which we've written about dozens of times.



You have two choices: Pay $15,000 over sticker and get a car, or wait for supply to catch up with demand and pay a more respectable price.

Actually, you have a third choice: Get your $1,000 deposit back and shop around, though lopsided demand means you won't get a Camaro at $500 under sticker anywhere.

If you want to let Chevy know what dealer is charging $15,000 over sticker, e-mail general manager Ed Peper at ed.j.peper@gm.com.

http://www.chicagotribune.com/busine...tory?track=rss

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Old 06-29-2009, 06:01 PM   #2
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Old 06-29-2009, 06:05 PM   #3
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GM going out of business has nothing to do with certain dealerships marking up 2010 Camaro's they are going out of business because the 2010 Camaro is the only vehicle they have even had a chance to mark up because the demand was higher then the supply.
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Old 06-29-2009, 06:08 PM   #4
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Also - last time I checked, GM wasn't "out of business". Business is slow, but they're not OUT of business.
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Old 06-29-2009, 06:08 PM   #5
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Old 06-29-2009, 06:31 PM   #6
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you know, i'm kind of tired of this double standard. when it comes to anything that would lower the cost and put the customer in a better position, it's always the same answer...sorry, the manufacturer won't let us do that. and this is true of all car companies, not just GM

but when it comes to screwing us out of more money, it's no longer up to the car company! because, of course, the car companies have no power over the dealers in any way!! it's a double standard that we buy into. and it's pure and complete

and we're not talking about dealers that just want to charge high prices. they are free to do that, no problems from me on that ground...i'll just shop somewhere else. i'm talking about dealers that make a deal to sell at a certain price, then after the fact, change prices, start marking up, refuse to sell the car to the person who made the order. this is dishonest, breach of an agreement, and in some states, illegal. but of course, GM (and all other car companies) don't want any part of it...once the car leaves their hands, you left to fend for yourself dear customer.

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Old 06-29-2009, 06:32 PM   #7
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Thankfully in Canada... its against the law for dealers to sell above MSRP for new cars.
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Old 06-29-2009, 06:53 PM   #8
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Quote:
Originally Posted by paulsandhu View Post
Thankfully in Canada... its against the law for dealers to sell above MSRP for new cars.
thats freakin awesome
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Old 06-29-2009, 06:53 PM   #9
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All the indignation in the world isn't going to change anything. Dealers are greedy and some people have more money than brains. Just remember who these dealers are and don't give them your business now or in the future.
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Old 06-29-2009, 06:56 PM   #10
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Thankfully in Canada... its against the law for dealers to sell above MSRP for new cars.
wait, really? that's sick
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Old 06-29-2009, 07:07 PM   #11
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Originally Posted by paulsandhu View Post
Thankfully in Canada... its against the law for dealers to sell above MSRP for new cars.
So, what do the dealers do? Drive 'em for 100 miles and sell them as USED for $5000 over sticker?
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Old 06-29-2009, 07:16 PM   #12
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Thankfully in Canada... its against the law for dealers to sell above MSRP for new cars.
one step closer to socialized auto dealerships
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Old 06-29-2009, 07:24 PM   #13
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Old 06-29-2009, 07:29 PM   #14
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Quote:
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So, what do the dealers do? Drive 'em for 100 miles and sell them as USED for $5000 over sticker?
Nasty thought, Captain, but you're right, there's almost always a way around the law.



Quote:
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one step closer to socialized auto dealerships
I SO don't like the sound of that , but must admit you might be right.



So, C5, while I agree with the report, I can't help but see the two-sided coin here....uncontrolled dealer greed & buyer ignorance, or in some instances, buyer greed too....I'll pay anything to have that car. Those without limitless finances must be be cautious and informed! Thus....Camaro5!!!!!!!!!!
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Old 06-29-2009, 07:31 PM   #15
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Quote:
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Thankfully in Canada... its against the law for dealers to sell above MSRP for new cars.
I love my Canadian Friends dearly. I also have several wonderful employees in the North!

They may not let dealers sell over MSRP, but the Government has their hands so deep in your pockets for Taxes etc. they don't need to.

Sorry guys, but your taxes are way off the map even compared to Illinois.
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Old 06-29-2009, 07:36 PM   #16
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Franchise laws can be changed since it is the Government in control of GM so it is no longer a privately owned company.. The GM that had to follow those franchise laws went bankrupt and with that all those laws do not apply.. The Government can tell the GM dealers what to go do with themselves if they want since they don't have to send them the cars.. I'm afraid to say this since I do not believe in socialism or communism however in this case, the dealers need to stop doing this as it is hurting the American people.. The dealers need to be forced to sell at MSRP by the Government or else their contract gets pulled...THe Government in this case can do exactly what it is preaching it will do with Healthcare which is to create a Government run insurance that all our current insurance companies cannot compete with.. It will drive all privately owned insurance companies out of business eventually since the Government does not have to make a profit to survive. The same can be said with dealerships in a much smaller scale.. It would be pocket change for the Government to set up Carmax like dealerships for new GM vehicles.. Why do it for healthcare yet not do it for the car industry?
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Old 06-29-2009, 07:48 PM   #17
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Franchise laws can be changed since it is the Government in control of GM so it is no longer a privately owned company.. The GM that had to follow those franchise laws went bankrupt and with that all those laws do not apply.. The Government can tell the GM dealers what to go do with themselves if they want since they don't have to send them the cars.. I'm afraid to say this since I do not believe in socialism or communism however in this case, the dealers need to stop doing this as it is hurting the American people.. The dealers need to be forced to sell at MSRP by the Government or else their contract gets pulled...THe Government in this case can do exactly what it is preaching it will do with Healthcare which is to create a Government run insurance that all our current insurance companies cannot compete with.. It will drive all privately owned insurance companies out of business eventually since the Government does not have to make a profit to survive. The same can be said with dealerships in a much smaller scale.. It would be pocket change for the Government to set up Carmax like dealerships for new GM vehicles.. Why do it for healthcare yet not do it for the car industry?
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Old 06-29-2009, 07:56 PM   #18
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The GM that had to follow those franchise laws went bankrupt and with that all those laws do not apply.
Do you have any support for this assertion? It doesn't sound right to me (and I'm a lawyer).
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Old 06-29-2009, 08:24 PM   #19
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Thankfully in Canada... its against the law for dealers to sell above MSRP for new cars.
That's only true for some provinces, not all. Even for provinces who have the law, there are many ways to get around. It. Trade-ins for one thing...
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Old 06-29-2009, 08:28 PM   #20
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Do you have any support for this assertion? It doesn't sound right to me (and I'm a lawyer).
Since when do they need to do anything legal?
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Old 06-29-2009, 08:37 PM   #21
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Do you have any support for this assertion? It doesn't sound right to me (and I'm a lawyer).
Hundreds of plaintiffs have pending lawsuits against old GM that are worth nearly $2 billion. They blame automotive defaults for their injuries, which in many cases are severe and crippling. All of those have been thrown out when the bankruptcy occurred as part of negotiations. Current and future cases. If you're a lawyer you must know this. Or did you miss the memo? The plaintiffs are considered unsecured creditors in the bankruptcies.

If the Government has literally done away with all potential court cases against them. What makes you think the Government has not done away with the ability for the dealers to sue as well for breaking old franchise laws which were contracts under old GM?
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Old 06-29-2009, 08:41 PM   #22
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Franchise laws can be changed since it is the Government in control of GM so it is no longer a privately owned company.. The GM that had to follow those franchise laws went bankrupt and with that all those laws do not apply.. The Government can tell the GM dealers what to go do with themselves if they want since they don't have to send them the cars.. I'm afraid to say this since I do not believe in socialism or communism however in this case, the dealers need to stop doing this as it is hurting the American people.. The dealers need to be forced to sell at MSRP by the Government or else their contract gets pulled...THe Government in this case can do exactly what it is preaching it will do with Healthcare which is to create a Government run insurance that all our current insurance companies cannot compete with.. It will drive all privately owned insurance companies out of business eventually since the Government does not have to make a profit to survive. The same can be said with dealerships in a much smaller scale.. It would be pocket change for the Government to set up Carmax like dealerships for new GM vehicles.. Why do it for healthcare yet not do it for the car industry?

The share holders might disagree about GM being a privately owned company. I'm pretty sure franchise laws are state laws, the feds don't get too involved there. I think I'll stop there.
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Old 06-29-2009, 08:51 PM   #23
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So if the dealers are GM customers how and why can Gm take away franchise licenses to profitable dealerships? Why can GM then sell those franchise licenses to a "new guy" down the street? If dealerships aren't the cause of Gm's bankruptcy, why are they shutting down dealerships in the name of "saving costs" and emerging out of bankruptcy?? It seems to me GM wants it both ways.
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Old 06-29-2009, 09:23 PM   #24
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I do not think the bankruptcy Court or appointed Trustee can simply throw out a lawsuit. I beleive the Plaintiff in an unliquidated damages case, such as a products liability case, simply becomes an unsecured creditor after obtaining a judgment, or, as I have done in the past when a Defendant I have sued on a case files for bankruptcy, you do not violate the automatic stay pursuant to the Bankruptcy code and you simply 1. wait for the stay to be lifted afer the bankuptcy is over and poceed with your suit or 2. file a motion to have the stay lifted to proceed with your suit which will typically 100% be granted if you can show the Court that there is sufficient insurance to cover the claim.

I can understand the question from Mikenmar, especially since he is an attorney, because I cannot see all GM franchises and GM being relieved from all their contractual duties due to a bankruptcy. I must have missed the memo as well. Why don't you enlighten the listserve and post the memo for us. Anything is possible, but It just does not seem feasible.

We are talking about the government owning 60% (I think) so who knows what they have done.

Quote:
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Hundreds of plaintiffs have pending lawsuits against old GM that are worth nearly $2 billion. They blame automotive defaults for their injuries, which in many cases are severe and crippling. All of those have been thrown out when the bankruptcy occurred as part of negotiations. Current and future cases. If you're a lawyer you must know this. Or did you miss the memo? The plaintiffs are considered unsecured creditors in the bankruptcies.

If the Government has literally done away with all potential court cases against them. What makes you think the Government has not done away with the ability for the dealers to sue as well for breaking old franchise laws which were contracts under old GM?
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Old 06-29-2009, 09:29 PM   #25
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Im not sure about the legality of it, but couldn't GM refuse to allocate cars to dealers that they know are over charging? Not saying they would or should just wondering.
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