Reorganization of finances
Single salary homes are looking more and more to installment loans as a way to pay bills. The unemployment rate is affecting Americans in a big way. Kelsey David of Pontiac, Michigan stated, “We were used to having two salaries. We didn’t live like kings or anything, but we were comfortable. Then my husband lost his job and he earned most of our money. We had to do some drastic reorganizing of our finances to make it through.”
Chrysler to cut dealers
According to lawyer Stephen Lerner, Chrysler will soon announce it will be cutting 800 of its 3,200 dealers throughout the country. Lerner is representing the auto giant’s soon to be fired dealers, The company has a list and will reject at minimum 800 franchises currently in business. As part of their bankruptcy, Chrysler will submit a list of dealers that they will continue to retain. A spokesperson stated that the company is working hard to “reduce the number of dealerships along with other restructuring actions” and that “800 is just speculation.”
Regardless of speculation, Lerner is already soliciting dealers who believe their franchises may be cut, asking them to contribute $4,000 to begin a legal fight. The business climate of Chrysler has been difficult at best throughout the past year. It already closed 400 dealers last year, but there remains too many showrooms particularly in heavy-traffic areas. The dealers who will be asked to continue operations are the ones who have shown the most promise in terms of profits and capitalization.
Dealers respond
David Kelleher, Chrysler dealership owner, stated he “wants to stay optimistic amid the uncertainty.” His hope is that since he built as strong a business as he could in the area, he will stay in business. “This is craziness,” he added. “You’re talking about 800 or 1,000 small-business owners being knocked out of business, I guess to serve the greater good.”
Despite the pending closing, many Chrysler dealerships are having a high in sales. They attribute this to all the press the company is getting, noting that “all publicity is good publicity.” A lot of Americans are taking advantage of the downfall in the auto giant, believing this to be the best time to take advantage of low prices. They are using their nest-eggs and installment loans to find deals on lower-priced vehicles.
The NADA, National Automobile Dealers Association
The NADA is set to begin lobbying against the huge cuts in Chrysler franchise locations this week. Martin Glorman of the NADA stated, “We know that some cuts need to be made, but the sheer number of what they are speculating would be disastrous. Imagine 800 franchises putting all their employees, from the owner down to the porters, out of business.” Workers are already bracing themselves in case their locations are the ones to close. Some have already quit and some are actively seeking alternative employment. “It’s not easy,” said Michael Drury of Pensicola, Florida. “We know what could most likely happen, but there just aren’t a whole lot of options out there. We are saving like crazy as much as we can now so we have some cushion in case the worst happens.”
In the end
Chrysler is filing bankruptcy, and surely this will take a toll on the market. Hopefully, the market will be healthy enough in coming months to absorb the additional unemployed Americans. Employees are already looking to family loans and installment loans as a way to pay bills, so unemployment would be an even heavier burden to bear.
