Wednesday, May 20, 2009

A Letter from A Dodge Dealer Who Lost His Franchise

From Gary North's Specific Answers (paid site, but he posted it as a free article). The letter was written by Mr. George C. Joseph, President & Owner of Sunshine Dodge-Isuzu in Melbourne, Florida.

Dr. North says:

"As you read it, think: "Where is our legal protection? If this can happen to him, what has happened to corporate loyalty and trust?"

"This has happened to almost 800 Chrysler dealers. GM has sent out notices to over 1,100 GM dealers that their franchises will not be renewed in 2010. GM plans to shut down 2,600 dealerships.

"You invest a lifetime in your business and then, through no fault of your own, this happens. This may be legal. It is surely unjust."

The legal protection clearly went out of the door in the bankruptcy court, where the 1st-lien senior debt holders got far less than junior, unsecured claim holders. Chrysler hasn't been a thriving, successful business of late, and as a business person he should have thought about the scenario, "What if Chrysler goes bankrupt? What will happen to my business?" But hindsight (if it comes) is always 20/20, and it's easy for an outsider to criticize. Mr. Joseph has my sympathy, and I share his outrage.


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