Yeserday, the local Lambo dealer here in south orange county CA shut its doors. They represented arount 10% of worldwide sales, which for Lambo, usually amounts to about 2,400 cars per year. Less wealthy folks forking over the benjamins. Signs of the times.
there has been 4 local dealer ships between here and Seattle that i KNOW of... my sister works for Ford, so she hears about them. obtw, all 4 dealerships have closed in the past 2 weeks... rumours has it a large family run op here with 4 different dealerships is on the brink as well.
They will be liquidating everything, furniture, fixtures, special tools, parts and of course inventory.
There was a story on NBC News this evening about how high-end retailers, expensive restaurants, hotels and spas are seeing a major drop in customers. Evidently, even the well-to-do are cutting back. BusinessWeek mentioned recently that Japan is having a lot of problems since no one's buying cars here and we are a very important market for them. Whether they like it or not, the rest of the world follows the United States. How the U.S. goes, so goes everyone else.
contract or not, the US auto industry needs to revamp their health care. having family from Michigan, most of which worked and retired from the auto industry, i can say that their benefits package simply has no place in today's society. it will take decades to flush current retirees out of the system, but lets face it, nearly every company (with the possible exception of Boeing and others) have greatly scaled back retirement benefits simply because they realize they will not be able to pay them anyway. besides the government bailout in general, i am not happy about paying for failed pension plans either.
I believe this is mostly because of the credit freeze. Most dealers do not own the cars on their lots. They have floor plan financing. Their bank line of credit allows the vehicles to remain on the auto lot for 90 to 180 days. After that, the dealer has to buy the car from their own cash. So dealers always try to move the cars fast enough so that they never actually own the cars. With the current market, vehicles are not moving and auto dealers are having to purchase more cars than ever before. Also, the inventory financing is getting much more restrictive and even cancelled in some cases. These large auto dealers run things with very thin margins. They only make profits on large volume. So when things slow down for too long, it can implode on them.
