Auto dealerships deal with crisis
Share Now on:
TEXT OF STORY
Scott Jagow: Detroit’s car makers are working feverishly to come up with plans to present to Congress. They have until tomorrow to submit their turnaround proposals. Yesterday, the head of the UAW said the union was willing to sacrifice to get a bailout for the Big Three as long as the car makers cut executive pay.
Meanwhile, auto dealerships around the country are anxiously waiting for something good to happen. Here’s Stacey Vanek-Smith.
Stacey Vanek-Smith: Twenty percent of all retail spending in the U.S. is done at auto dealerships. Or at least it was. About 700 dealerships have closed their doors so far this year.
Andy Koblenz is with the National Automobile Dealer’s Association. He says the credit crunch has been especially rough on dealers.
Andy Koblenz: The dealers carry a very expensive and very large inventories. And they also have needs for financing for the customers themselves.
The money the U.S. government has pumped into credit markets has helped, says Automotive News’ Keith Crain. But, he says, the best thing the country can do for U.S. auto dealers is bail out U.S. auto makers.
Keith Crain: Historically, whenever there’s been the smell of death about a franchise, people shied away completely and Plymouth went away and Studebaker and Oldsmobile, just on the suggestion.
I’m Stacey Vanek-Smith for Marketplace.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.