I am President of Zimmer Chrysler Jeep in Florence and currently serving as Chairman of the Kentucky Automobile Dealers Association. It is with disbelief that I find myself writing this editorial today but last week our dealership was told by Chrysler that they were terminating our franchise. I have been working at our family owned dealership Zimmer Chrysler since 1984, and our family has been selling and servicing vehicles since 1929.
A dangerous misconception about the auto industry is leading to the unnecessary loss of nearly 200,000 high-paying jobs through the forced closing of hundreds of new car dealerships in the United States.
While the economic crisis in the auto industry is real, the notion that new car dealers somehow create a cost burden to auto manufacturers is wrong, and the President’s Auto Task Force is relying on this misinformation to force rapid General Motors and Chrysler dealer reductions.
The fact is, dealerships are not owned by auto manufacturers but by independent operators, who must buy their land and buildings, hire and pay employees, pay for new motor vehicles from the manufacturer, and even buy the sign out front with the manufacturer’s logo on it.
The franchised dealers for General Motors and Chrysler provide jobs all across the county, so these rapid reductions would have a pervasive, negative effect on our entire economy. Auto dealership jobs provide higher than average wages and benefits, and the people losing them will not be able to find other employment due to the dire state of auto retailing.
In addition, rapid dealership closures would create other adverse ripple effects, such as decreased sales and income tax revenue for state and local governments and more non-performing real estate loans.
In Kentucky, new car dealerships employ over 13,000 individuals with an annual payroll of $538 million. Kentucky new car dealers’ $7.3 billion in annual sales comprises 15 percent of total retail sales in the state.
Auto manufacturers created the franchise dealer network to outsource virtually 100 percent of the cost associated with selling and servicing cars. And more than 90 percent of the revenue that auto manufacturers receive comes from -- guess who -- new car dealers.
Dealers have invested about $233 billion to create an auto sales network that provides a vast distribution and service channel for consumers. A forced rapid reduction in the number of dealerships operating in the U.S. would reduce competition and convenience for consumers and make it harder for struggling manufacturers to survive.
The number of new car dealerships in the United States has declined in recent years, and that trend has intensified in the current crisis. In Kentucky, nearly 20 have closed in the past six months due to economic conditions.
While that trend may continue in Kentucky and the nation until the recession ends, unwise decisions by the President’s Auto Task Force to force dealership closures not based on sound economic principals will result in unprecedented job losses in Main Street Kentucky and America while harming the companies that we are trying to serve.
John Zimmer is President of Zimmer Chrysler in Florence and currently serves as Chairman of the Kentucky Automobile Dealers Association.
Other Columns
Forced dealership closings add to harm
- Other Columns
-
-
‘I Won’t Be the One’ starts tonight
Starting tonight at the Rowan County Senior High School boy/girl basketball double header, Rowan UNITE and its partners Rowan County Champions, Rowan County Schools Family Resource and Youth Service Centers and the Pathways Regional Prevention Center will be kicking off the “I Won’t Be the One” Campaign.
-
Help your child succeed @ YOUR Rowan County Public Library
What is the most important trait you would like to develop in your child? If you are like most parents, intelligence is probably at the top of your list. We all want bright, smart children.
-
Youth drinking in Rowan County
What does youth drinking look like in Rowan County? Information about youth alcohol consumption is collected from sixth, eighth, tenth, and twelfth graders every two years in the Kentucky Incentives for Prevention Youth, or KIP, Survey. This last data available is from 2010.
-
NEW YA materials @ YOUR Rowan County Public Library
The Teen Area of YOUR Rowan County Public Library is full of new titles for young adults. Stop in and take a look at the titles just waiting to be checked out.
-
The café is open! @ YOUR Rowan County Public Library
We’ve been waiting . . . and waiting . . . and we don’t have to wait any longer. The Library Café is open!
-
Now is the time! Anti-drug summit set
Rowan UNITE has begun planning our 3rd annual Community Anti-Drug Summit. Mark your calendars for the summit to be held on Thursday, June 14. To help us prepare for speaker list for the summit, Rowan UNITE needs to know what you want or need to hear about substance abuse.
-
Seize the opportunity: Time to get to work
The holidays are over, and we are all returning to work . . . serious work – not just the marking of time until the office or store closes for the holidays. So it is time to get to work!
-
Get ready for another bumpy ride
Ready or not, they’re coming back to town. At noon Tuesday, lawmakers will convene a General Assembly confronting major problems and which may prove very contentious. Their plates will be full in a budget session with little money in an election year.
-
Just say no to New Year’s resolutions
We all have heard the saying “All that is necessary for the triumph of evil is that good men do nothing.” The time for “doing nothing” has passed. Without action by good people, Rowan County will continue to face drug problems.
-
Help with those resolutions @ YOUR Rowan County Public Library
A brand new year is almost here—an opportunity for us to make choices to be better and to do better than we did during 2011. So, many of us will make New Year’s resolutions, and, although we do so with the best of intentions, we could use a little help.
- More Other Columns Headlines
-
‘I Won’t Be the One’ starts tonight
