In its bankruptcy filing the ailing company Chrysler disclosed that it might eliminate about 800 dealerships in a matter of a few weeks. This might save the company but will axe thousands of jobs. Chrysler said that a little over half of its dealers make up ninety percent of its sales, which is why it wants to eliminate the more poorly performing locations.
In many small towns these dealerships are not only the largest employers but also contribute greatly to the government's tax coffers. Not only that many small town communities depend on dealers for sponsorships, while local newspapers get thousands of advertising dollars annually from dealers. In short, the ripple effect could prove to be really devastating.
Bart Wolf, the general sales manager at Wolf's Motor Car Co. in Plymouth, Wis., estimated he donated an average of $10,000 per year for local high school and middle school events, supporting band trips and athletic activities.
"The way things are going now, that could be cut down to under $2,000," he said. "It's hard to say no to anyone, but this could make things tough."
Local media will feel the pinch, too. The average new car dealer spent $341,000 on advertising last year, said Paul Taylor, NADA's chief economist. About a quarter went to newspapers, which are already in a struggle for survival.
"The way things are going now, that could be cut down to under $2,000," he said. "It's hard to say no to anyone, but this could make things tough."
Local media will feel the pinch, too. The average new car dealer spent $341,000 on advertising last year, said Paul Taylor, NADA's chief economist. About a quarter went to newspapers, which are already in a struggle for survival.
Times are becoming extremely challenging. We wish those affected all the best. No matter what, create a nice weekend :).
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