Dealerships closed due to GMAC Floorplan Rejection

[XDCX]

I've read two different news reports of Chrysler NEWCO Dealerships that were forced to close down because GMAC would not approve their floorplan application.

Sadly, I fear that there will be more of these stories in the coming weeks and months as GMAC completes their analysis. Based on a report in Automotive News, it may take six months for GMAC to complete the approval process.

Here are the links to the news reports for the closed dealerships:

• Bembenek Chrysler-Jeep-Dodge - WI - click here
• Espanola Chrysler Jeep - NM - click here
• Chrysler Dodge Jeep of White Oak - PA
• Mike Young Chrysler Dodge Jeep - TX
• Park Cities Chrysler-Jeep-Dodge - TX

[ssdd]

I was just swapped over yesterday to GMAC it was pretty painless...
kind of nice to divorce CFC, I just hope the new marriage is good...

[possum]

Back in the day, CFC was great for us. Like a lot of marriages, it got bad, and they cheated on us. We got to date GMAC, but we never got to the good part where they were about to ..... us.

[XDCX]

Originally Posted by ssdd

I was just swapped over yesterday to GMAC it was pretty painless...
kind of nice to divorce CFC, I just hope the new marriage is good...

Thanks for the update.

I think you're the first member here to swap over from CF to GMAC with a permanent floorline. I'm happy to hear that it was an easy and painless process.

[XDCX]

Sadly, news reports indicate that GMAC has forced another NEWCO dealer to go out of business because they pulled his floorplan.

• Chrysler Dodge Jeep of White Oak - PA

The report implies that the dealer paid $900K to acquire two neighboring dealers in 2006 to complete Project Alpha. CF provided the financing to complete the purchase.

To the extent that GMAC doesn't offer an appeal process it appears that the dealer has limited options. Although the SBA has a program that's supposed to help dealers in this situation, it doesn't appear to be working.

Here's a link to the news report - click here

[CL Pgh]

Originally Posted by XDCX

• Chrysler Dodge Jeep of White Oak - PA

Heard this last night but hadn't seen anything in print... until now. Unfortunetly won't be the last one around here to drop.

[XDCX]

Originally Posted by CL Pgh

Heard this last night but hadn't seen anything in print... until now. Unfortunetly won't be the last one around here to drop.

Sadly, I think you're correct.

I've read that GMAC doesn't think they'll complete the process of converting CF floorplans to permanent GMAC floorplans until November - they mentioned something about a six month review period.

My bet is there will be more of these headlines in the coming months.

[XDCX]

I meant to add this dealer last week:

• Mike Young Chrysler Dodge Jeep - TX

The dealer also had a Chevrolet franchise that was closed down at the same time. News reports indicated - "Chrysler Financial was willing to leave its vehicles at the dealership and work with the owners, GMAC was not, forcing the filing..."

Interestingly, the dealer also cited slow payment of CARS rebates as a contributing factor to the dealerships' closing.

Here's a link to the news report - click here

[XDCX]

Sadly, it appears that there's going to be another dealer added to the list:

• Park Cities Chrysler-Jeep-Dodge - TX

While the newspaper report doesn't mention GMAC, it indicates that Chrysler Financial is calling the dealership's loans and the dealer has not been able to find another flooring source.

Here's a link to the news report - click here

[possum]

This is a bad deal. I've known Leo for many, many years, served on the DAA Board with him, and have consulted with him many times. He is a CAR GUY, and a good Dealer.

Chrysler is screwing up so much, they may never recover.

Leo will emerge with another company, even though he says not, and he will sell lots of cars!

[XDCX]

Originally Posted by possum

This is a bad deal. I've known Leo for many, many years, served on the DAA Board with him, and have consulted with him many times. He is a CAR GUY, and a good Dealer.

Chrysler is screwing up so much, they may never recover.

Leo will emerge with another company, even though he says not, and he will sell lots of cars!

Great comments.

I think what makes this period so unique for car dealers is that talent and hard work no longer guarantee success. If you have the wrong franchise with the wrong flooring source, it doesn't matter how talented you are the odds are against you.

I still don't understand why the Task Force thought it was necessary to wipe out Chrysler Financial. If I had to guess, I'd guess that it was a political stab to inflict pain on Cerberus.

Regardless, the fact that CF has been wiped out will make it harder for Chrysler and their dealers to stop their market share slide and return to profitability.

[XDCX]

Originally Posted by XDCX

I meant to add this dealer last week:

• Mike Young Chrysler Dodge Jeep - TX

The dealer also had a Chevrolet franchise that was closed down at the same time. News reports indicated - "Chrysler Financial was willing to leave its vehicles at the dealership and work with the owners, GMAC was not, forcing the filing..."

Interestingly, the dealer also cited slow payment of CARS rebates as a contributing factor to the dealerships' closing.

Here's a link to the news report - click here

In fairness to GMAC, I don't think I'd blame them for dropping the flooring account if the allegations that were made in court are true.

Chrysler Financial and GMAC allege that the dealership was $2 Million SOT and the dealer principal established a separate bank account in an effort to divert funds away from an account monitored by CF's "keeper."

Here's a link to the news report - click here

[ohiobuckeyes]

WOW....Got on to GMAC very easy. Our dealership has a 30 year history with GMAC. At first want our Chevrolet, Chrysler, Dodge, Jeep but for the last 15 years had to floor with CFC. GMAC did not want the CDJ business. Good Luck!