Posts Tagged ‘dealerships’

Is Obama Closing Dealerships As Political Punishment?

May 28, 2009

I’ve been trying to sort out why it would be beneficial to shut down car dealerships when the auto industry is facing bankruptcy.  After all, more dealerships means more car sales.  And it would very much seem that more sales would be a good thing for a struggling industry.

It would be one thing if the dealerships were corporate-owned.  Corporations shut down underperforming locations all the time in order to consolidate cash and improve profitability.  But the dealerships that are being closed are NOT corporate-owned; they are private.  So you kind of have to wonder what is going on.

On possible reason is that fewer dealerships will be able to create more sales and therefore create more “buzz” by improving facilities and having more potential customers.  Call it the “wow” factor.

In any event, the real question is why some dealerships are closed and others are allowed to remain open.

One big example in my own local area is Dodge City Chrysler in La Quinta, the management of which was stunned to find the dealership on the closure list.  They are appealing the decision, but intend to remain open even if they are “closed” by Chrysler as a service department and as a pre-owned dealership.  The only thing that stands in the way of that plan would be that the current zoning laws don’t allow used car sales.  But the city promises to work with Dodge City if the appeal fails.

Why close down Dodge City?  It’s turning a profit.  It’s successful.

The answer, it turns out, may be “an enemies list.”

We find out the decision to close dealerships was made by the Obama administration’s task force, and NOT by Chrysler.  And we begin to find out a great deal more about the dealerships that were closed, and what political contributions they made to which political causes, as well as dealerships that are being allowed to remain open, and what political contributions they made to which political causes.

ChryslerDealershipShutdown examines the political donations of dealerships scheduled to close versus those that are being allowed to remain open and leads to a frightening conclusion: it very much appears that dealerships are being closed down because of their political contributions, rather than because of purely business considerations.

What follows is an article by Doug Ross dated May 27, 2009:

Dealergate: Stats demonstrate that Chrysler Dealers likely shuttered on a partisan basis

This work builds upon the research done by numerous parties, most notably Joey Smith. It is a follow-up to my original post, entitled “Did anti-Obama campaign contributions dictate which Chrysler dealers were shuttered?” The odds that these closings occurred without partisan bias are roughly equivalent to the odds that Jean Claude Van-Damme will grab a Best Supporting Actor Oscar next year for a remake of Terms of Endearment.

How did the U.S. government’s “car czar” decide which Chrysler dealers to close and which would remain open? No one appears to know, not even the President of Chrysler:

…Lawyer Leonard Bellavia, of Bellavia Gentile & Associates, who represents some of the terminated dealers, said he deposed Chrysler President Jim Press on Tuesday and came away with the impression that Press did not support the plan…

It became clear to us that Chrysler does not see the wisdom of terminating 25 percent of its dealers,” Bellavia said. “It really wasn’t Chrysler’s decision. They are under enormous pressure from the President’s automotive task force.”

Follow the evidence trail, below, and judge for yourself.

Dealers on the closing list donated millions to Republicans, $200 for Obama

The initial pass at the list of shuttered dealers showed they had donated, in the aggregate, millions to Republican candidates and PACs and a total of $200 to Barack Obama.

In fact, I have thus far found only a single Obama donor ($200 from Jeffrey Hunter of Waco, Texas) on the closing list.

Another review of all 789 closing dealerships, by WND, found $450,000 donated to GOP presidential candidates; $7,970 to Sen. Hillary Clinton; $2,200 to John Edwards and $450 to Barack Obama.

Now, and this is important, Chrysler claimed that its formula for determining whether a dealership should close or not included “sales volume, customer service scores, local market share and average household income in the immediate area.”

Dealer Jim Anderer told Fox News’ Neil Cavuto he can’t comprehend how his dealership can be among those killed: he stated that his sales volume ranking is in the top 2 percent of all dealers.

Furthermore, Anderer says explanations aren’t forthcoming. “They won’t tell us. They seem to be running for cover right now because they won’t give us a solid explanation. They come up with all these reasons, but none of them seem to make sense… This is insanity. The government is stealing my business. And they’re telling me there’s nothing I can do about it… There was no process that you could put your finger on and say, ‘Hey, we cut 25 percent of the lowest performing dealers.’ They didn’t do that. Nobody will give us a real clear explanation of the formula that they came up with.”

The odds of a non-partisan process being employed can best be illustrated by RLJ.

The Mysterious Case of RLJ

In Smith’s research, one company kept popping up on the list of dealerships remaining open. The company is RLJ-McLarty-Landers, which owns six Chrysler dealerships. All six dealerships are on “the safe list.”

RLJ’s owners “are Steve Landers (long-time car dealer, 4th-generation dealer), Thomas “Mack” McLarty (former Chief of Staff for President Clinton), and Robert Johnson (founder of Black Entertainment Television and co-owner of the NBA’s Charlotte Bobcats)… McLarty campaigned for Obama in 2008, and Johnson has given countless amounts of money to Democrats over the years.

Smith examined RLJ’s markets, which I’ve illustrated below.

Bentonville, AR Market

1. Bentonville, AR Landers-McLarty (RLJ owned)
2. Springdale, AR Springdale Chrysler-Jeep (owned by Harold Schwartz)
3. Springdale, AR Steve Smith Country

Springdale is about 15 miles south of Bentonville.

The 2 Springdale dealerships gave no money to any political candidates since 2004. The 2 dealership will close in June while the RLJ-owned dealership in Bentonville will remain open.

The Landers-McLarty dealership will have no other Chrysler dealers within a 20-mile radius of the dealership.

The closest competitors will be in Pineville, MO (22 miles away) and Fayetteville, AR (27 miles away).

Huntsville, AL Market

1. Huntsville, AL Landers McCarty D-C-J (RLJ Owned)
2. Athens, AL Champion Chrysler Dodge (owned by Jeffrey Hamm)
3. Decatur, AL Cloverleaf C-D-J (owned by Kevin Morris)

The dealerships in Athens and Decatur gave no money to any political candidates since 2004. Landers-McCarty and the Athens dealership will remain open while the Decatur dealership will close in June.

Here is a link to the document containing the information gathered on RJL-McLarty-Landers. It appears that the company will benefit greatly from the reduced competition in their markets. For the most part, the dealerships that are forced to shut down in the 5 markets have either given no money to candidates or have donated to GOP candidates in the past

Branson, MO

There are 4 dealerships within 30 miles of Branson, MO.

1. Branson, MO Tri-Lakes Motors (RLJ owned)
2. Ava, MO Davis Dodge (owned by Larry Davis)
3. Ozark, MO Heritage Chrysler-Jeep (owned by Kay Church)
4. Ozark, MO Ozark Dodge (owned by Kay Church)

Mr. Davis and Ms, Church gave no money to any political candidates since 2004.

The RLJ owned dealership in Branson will remain open while the other 3 dealerships will be forced to close in June.

Tri-Lakes Motors in Branson (RLJ owned) will have no other Chrysler dealers within a 30-mile radius of its dealership…

Lee’s Summit, MO

There are 5 Chrysler dealerships near Lee’s Summit:

1. Lee’s Summit Dodge-Chrysler-Jeep (Lee’s Summit, MO)
2. Crawford’s Raytown (Jeep) (Raytown, MO)
3. Mitch Crawford’s Holiday Motors (Chrysler) (Raytown, MO)
4. Raytown Dodge Company (Dodge) (Raytown, MO)
5. Milner-O’Quinn Chrysler-Dodge-Jeep (all 4 brands) (Harrisonville, MO)

#1 is located in Lee’s Summit and is owned by RLJ-McCarty-Landers.

#2, #3, and #4 are located 9 miles northwest in Raytown, MO and is owned by Michael Crawford.

#5 is located 19 miles south in Harrisonville, MO and is owned by Charles O’Quinn.

The Lee’s Summit dealership will remain open while the other 4 in Raytown and Harrisonville will close. The Lee’s Summit dealership will have no other Chrysler dealerships located within at least a 20 mile radius. All of the local competition will be wiped out due to the Chrysler closings.

Bossier City/Shreveport, LA Market

There are 3 dealerships in this market:

1. Bossier City, LA Landers DCJ (RLJ owned)
2. Shreveport, LA Roundtree Automotive Group
3. Shreveport, LA Bob Post/Hebert’s Town and Country

Marshall Hebert (owner of Hebert’s Town and country) gave $4,250 to GOP candidates, $2,500 to Dem candidates, and $1,300 to the NRCC since 2004. Mr. Hebert is also on the National Auto Dealers Association Board of Directors representing Louisiana.

Frank Stinson (owner of Roundtree) gave $24,000 to GOP candidates and $3,400 to Demcocratic candidates since 2004.

The Bossier City dealership owned by RLJ-McCarty-Landers and the Shreveport dealership owned by Marshall Hebert will stay open. The Shreveport dealership owned by Stinson will be forced to close.

But that’s not all

Smith and various tipsters also point to Lithia Motors. Sidney Deboer will “come out a winner” due to the shutdown of various competitive dealerships.

Of 29 existing dealerships, Smith reports that Lithia will likely have a net gain of three new dealers after the dust settles (they lose just two and may gain five). Debeor has donated nearly $15,000 to two Democrat candidates and approximately $8,250 to four GOP individuals.

What are the Odds?

All other factors being equal, what are the odds that RLJ’s dealerships would remain open while all other area dealerships would be shuttered? The approximate odds of such an occurrence can be calculated. 789 of the Chrysler’s dealerships are closing, which represents 25% of the total (according to MSNBC).

Recall that Chrysler claimed that its formula for determining whether a dealership should close or not included “sales volume, customer service scores, local market share and average household income in the immediate area.”

Thus, the odds that any, randomly selected, single dealership would remain open is roughly 75%. The odds that a single dealership would close is roughly 25%.

In the Bentonville, AR territory, the odds that RLJ would remain while its competition gets axed is .75 * .25 * .25 = .046875 (4.6%).

In Huntsville, AL, the odds are .75 * .25 * .25 = .046875.

In Branson, MO, .75 * .25 *.25 *.25 = .01171875.

In Lee’s Summit, MO, .75 * .25 *.25 *.25 *.25 = .0029296875.

In Shreveport, LA, .75 * .25 *.75 = .140625.

What are the odds of all of these RLJ dealerships remaining open while their competitors are wiped out? Maybe 1/10,000,000 of 1%. Yes, that’s one ten-millionth of one percent.

Approximately the odds that I’ll win American Idol. Or that you’ll land two frisbees, simultaneously, on each of Barack Obama’s teleprompters during one of his televised speeches.

Hello, mainstream media: anyone listening? How about you, class-action lawyers?

What we find is that RLJ dealerships whose ownership has close ties to the Democratic Party remain open in teritory after teritory, while competitors who gave to Republicans are closed down again and again.

Something isn’t right.

Red State has more, offering links to stories of dealerships that are closed, and clearly shouldn’t have been, as well as describing the Republican connections to dealerships that ended up on the closure list.

Richard Nixon created an enemies list of major political oppoenents in order to “screw” political enemies, by means of tax audits from the IRS, and by manipulating grant availability, federal contracts, litigation, prosecution, and by other means.

If the dealership closures are a form of political attack, this would be FAR worse than Nixon’s abuse of power, simply because Nixon and Colson used a scalpal to cut at enemies; whereas Obama and his Task Force are using the equivalent of a nuclear bomb.

We’re talking about somewhere around 20,000 employees at these 789 dealerships.

Let me repeat the words of the attorney to deposed the president of Chrysler:

“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.”

Even Nixon never dreamed of abusing his presidential power like that.