For those holding out hope that General Motors (NYSE:GM) and Chrysler will survive, it's time for a reality check. It''s over. It ended today when a decision was made to close hundreds of Chrysler and up to a thousand GM dealerships across the country. Some just have not figured it out yet.
What the powers that be fail to recognize, is that in removing these less productive dealerships from the individual auto makers ranks, they remove competition. I currently have no less than three Ford (NYSE:F) dealerships that I can shop at within a 1 hour commute. I have the ability to shop all 3 for the lowest priced vehicle, the lowest priced factory authorized service and the lowest parts cost.
Multiple dealerships allow for superior customer service in that if a consumer takes a car to one dealer for service, and they do not have a required part, it will be obtained the same day from one of the other dealerships. The closings of local dealerships will create parts procurement problems, cause long delays in getting vehicles serviced and allow for increased pricing to occur.
It may take a few years years, but it's time to recognize that GM and Chrysler will only be given a temporary reprieve from this, as the reality of newly created small market monopolies sets in without any restrictions that would be applied to companies like Sirius XM (NASDAQ:SIRI) and other antitrust cases.
Position: Long Siri, F