Chrysler Dealerships: Curiouser and Curiouser.

May 26, 2009

The Director Blue blogpost on potential political motivations for the shuttering of Chrysler dealerships is being updated continually, and the hypothesis is now being examined very closely. The difficulty, of course, lies in finding a control group of dealerships that are not being shut down but have given money to the Obama campaign. They exist, but that does not establish whether or not the closings are politically motivated.

Naturally, the situation is complicated by the fact that entrepreneurs may trend libertarian/Republican in the first place.

The entry now features a prominent disclaimer:

Special note for moonbats: no one here is saying that the sole criterion for closing a dealership was partisanship. What we ask is: does it seem odd that the list of closed dealerships appears to have contributed a grand total of $200 to Barack Obama and millions to GOP candidates/causes?

Quote from an attorney who Deposed Chrysler’s president last week: “It became clear to us that Chrysler does not see the wisdom of terminating 25 percent of its dealers… It really wasn’t Chrysler’s decision. They are under enormous pressure from the President’s automotive task force.”

Stay tuned. Data crunching is underway.

And there is this:

Chrysler dealers will soon launch their legal opposition to the company’s plan to cut 789 dealerships in less than a month, arguing the company has asked for too much freedom from state laws protecting dealer agreements.

Michael Bernstein, an attorney with Arnold & Porter who represents the Chrysler National Dealer Council, said the dealers may offer a number of objections to the plan in U.S. bankruptcy court, and that the case will enter some uncharted legal territory.

“If there is going to be any rejection of dealers, it’s in everybody interests for the transition to be as smooth and painless as possible,” he said Friday, adding “anxiety and uncertainty are not productive.”

The decision by Chrysler comes as part of the automaker’s plan to sell most of its assets — including the 75 percent of its dealers it wants to keep — to a “new” Fiat-Chrysler venture.

Chrysler’s request goes far beyond just ending dealer contracts. It would bar an affected dealer from selling any Chrysler vehicle or part under warranty after June 6. Any payments or damages from ending the contract would be left with the “old” Chrysler whose liquidation won’t cover the liabilities it assumes.

And Chrysler wants to block dealers from appealing the decision with state authorities, and asked U.S. Bankruptcy Judge Arthur Gonzalez to rule that federal bankruptcy law supersedes all state laws over dealer contracts.

Under the laws of most states, if Chrysler wanted to end a dealer contract it would have to give the dealer several months to wind down its business, offer to buy back vehicle and parts inventory and, in some cases, offer reimbursement for a number of costs, such as remodeling.

But in bankruptcy, Chrysler contends it can avoid any such liabilities as part of the case.

Chrysler told the targeted dealers it would set up a voluntary program to shift their vehicle and parts inventory to dealers who will remain in business.

Bernstein said under bankruptcy law Chrysler would have to show how its “reasonable exercise of business judgment” led to the closing list.

Both lists are available here.

And AllahP weighs in at Hot Air:

I’m skeptical that this is as bad as it looks — it’d be politically suicidal, for no benefit greater than petty revenge — but consider it [the Director Blue roundup] your must-read of the day. Don’t stop before the updates either or you’ll miss profitable dealers scratching their heads trying to figure out what mysterious sin they could have committed to warrant termination.

. . . . .

Could be that dealers, being entrepreneurs, trend heavily Republican anyway. Without some kind of control sample, there’s no way to judge if this is corrupt or just representative. Like Ross says, further research is required. Anyone think the media’s game?

. . . . . . . . . .

He added the government task force, which he criticized for having no members with retail experience was, in effect, attacking U.S. entrepreneurs…

“I think it’s unconstitutional,” said Jim Anderer, owner of Island Jeep in Lindenhurst, New York.

“The Fifth Amendment clearly states you cannot take another person’s property without due process or compensation. Even in eminent domain, there is an appraised price on the property being taken by the state.”

I don’t know. To believe this is true, you’d have to believe Obama applied some awfully heavy-handed pressure to get his way. And really, what are the odds of that?

Yeah. It would be unprecedented. Make sure to check out AllahP’s links.

Posted in Uncategorized