A week ago today, we reported that restructuring of the Big 3 automakers could lead to closure of many small-town auto dealerships, and even without laws to override franchise agreements, almost 1,000 of the 20,000 or so U.S. dealers are expected to close next year. Today, The New York Times has its version of the story. If you're a journalist thinking about doing a similar story, this story and last Sunday's item are two places to start.
"At least 70 percent of the dealerships that have closed so far this year sell American cars, and better than 60 percent of the remaining dealerships sell the troubled Detroit brands," Clifford Krauss reports. "Even if Ford, Chrysler and G.M. survive, many believe a comeuppance is inevitable among dealerships; indeed, for years the nation has had more dealers for domestic brands than warranted by the sales volume of the Detroit automakers. ... In October alone, 20,000 employees of auto dealerships lost their jobs nationwide, more than half of those who were newly unemployed in the retail trade, according to the Labor Department. ... And now the credit market — the lifeblood of any car dealership — is frozen."
Reporting from Quincy, Fla., Krauss gets the rural angle: "The auto dealers are not just businesses, of course. Most of them are deeply rooted in their communities, and each is a slice of Americana — their big flags flying, their radio advertisements compelling attention and their Little League sponsorships and other charity helping to improve the lives of local people." But he also notes, "Car dealers are not entirely blameless for their fate. Auto analysts say they did not push Detroit hard enough to build better-quality, more efficient cars. They note that the dealers lobbied hard in state capitals for laws to protect their franchises from the Detroit manufacturers who wanted to limit their numbers and determine their locations." (Read more)
The Big 3 get little sympathy a few hours up the Chattahoochee River valley from Quincy, in West Point, Ga., where a Kia plant will start making light SUVs next fall. "In West Point, disdain for Detroit commingles with gratitude for Kia," a Korean company, reports Richard Fausset of the Los Angeles Times. "The new jobs will counter the devastating collapse of the textile industry in this border region of Alabama and Georgia." (Read more)
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