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[0:01] ..." in the WBZ news or were talking -- John all conflicts. An auto industry analyst at global insight in Lexington. About the GM announcement today that it's sending out termination letters -- had sent -- to 1100 dealers nationwide what do you think what you're"...
[0:16] ..." I think GM I was pretty impressive today and they I was asking the question. That you announced dealer terminations before -- in bankruptcy because this all of the state franchise laws still apply to -- you know they don't apply -- Chrysler anymore because -- in bankruptcy. Well but -- they got around this is they act giving the dealers who were terminated --"...
[1:35] ..." extra 2600. On what kind of like dealer network does that leave GM with -- is it comparable to its sales volume not just now but assuming that there is a recovery some point --"...
[1:51] ..." they've said that they looked that sales per outlet. Four companies like Toyota and Honda which are about twelve or thirteen hundred and compared them to GM which is may be three to 500 sales per outlet and Tuesday. -- GM dealer body was put together -- in a more prosperous time for GM they have enough deal was not easily support -- 30% market -- we're looking at 17%. Share of them going -- so you know this had to be -- the question is how -- do you have to cut there's also the issue that needs to be considered that toyotas and -- literally sell themselves you don't need as many dealers pushing hard to sell -- Toyota -- people are willing to drive the distance to get one when -- GM -- it may not be quite that -- and actually. They really should be. Ending up with with a lower sales to dealer ratio and then Honda or Toyota may be you know seven or eight or 900 per dealer instead of the twelve or thirteen hundred that we see with Toyota and Honda."...
[3:38] ..." whether any of the real big -- ways have gotten. Letters from GM -- I mean I'm thinking locally you know the irony is Ernie box people like that."...
[4:22] ..." to have to follow suit I mean we're seeing price we've seen GM could -- be next."...
[4:33] ..." and Ford has very cleverly. And able to yet much of what GM and Chrysler getting with the threat of bankruptcy. Without having to have that threat of bankruptcy. -- have been very impressed with the way"...
[4:49] ..." when we look at the end of 2010 what kind of an auto industry do you expect domestically."...
[4:55] ..." We're certainly still going to have -- that General Motors I think Chrysler is still a bit more if he. I think they got to survive the bankruptcy but then you don't assume they're going to get out of bankruptcy. Before the economy has fully recovered and before auto sales have significantly recovered -- you know Chrysler has the bridge that gap between when they get out of bankruptcy and went auto sales recovered so I think we we have. The certainty of a slimmed down GM and Ford. Actually maintaining. Close to the market share that they have now and -- Ford's case I think they're going to increase. Marketshare advocate -- were looking at about 17%. To 18% going outbound. Chrysler expects that is more iffy and and Chrysler's sales may suffer more -- GM's sales Ford again we expect to increase. Its market penetration. If they can stay out of bankruptcy which we think it's a"...
[0:00]" This is Lisa Meyer in the WBZ news or were talking -- John all conflicts. An auto industry analyst at global insight in Lexington. About the GM announcement today that it's sending out termination letters -- had sent -- to 1100 dealers nationwide what do you think what you're her."
[0:16]" I think GM I was pretty impressive today and they I was asking the question. That you announced dealer terminations before -- in bankruptcy because this all of the state franchise laws still apply to -- you know they don't apply -- Chrysler anymore because -- in bankruptcy. Well but -- they got around this is they act giving the dealers who were terminated -- December of 2010. To conclude their operations. And their franchise agreements expire in October of 2010. So this is being done with men. The franchise agreement."
[0:56]" You know this thing that struck me listening to this was that you know I mean we've been odd you know typically as as we tend to do harping on this one number. But that's just the tip of the iceberg I mean you got the 500 other dealers. They've got performance standards that they're setting into place -- guys who carry more than one make -- car could get. Acts as well."
[1:18]" Yeah they want to 1182600. Dealers in total this was 1100 today and as they said 500 more for Saturn Saab Hummer. The -- giving just beginning."
[1:32]" When when that's complete when you've got when you eliminate these extra 2600. On what kind of like dealer network does that leave GM with -- is it comparable to its sales volume not just now but assuming that there is a recovery some point --"
[1:47]" Well yeah that's the idea they I think they ran the numbers in fact when they've said that they looked that sales per outlet. Four companies like Toyota and Honda which are about twelve or thirteen hundred and compared them to GM which is may be three to 500 sales per outlet and Tuesday. -- GM dealer body was put together -- in a more prosperous time for GM they have enough deal was not easily support -- 30% market -- we're looking at 17%. Share of them going -- so you know this had to be -- the question is how -- do you have to cut there's also the issue that needs to be considered that toyotas and -- literally sell themselves you don't need as many dealers pushing hard to sell -- Toyota -- people are willing to drive the distance to get one when -- GM -- it may not be quite that -- and actually. They really should be. Ending up with with a lower sales to dealer ratio and then Honda or Toyota may be you know seven or eight or 900 per dealer instead of the twelve or thirteen hundred that we see with Toyota and Honda."
[3:05]" And and I was also hearing him say eyes something to -- affect -- going to hold them to even stricter sales standards and pastor."
[3:12]" Yes I'm sure they're going to have to do our otherwise they are definitely going to lose sales Belichick got to do is about this season they have been able. To a man say in how this is crazy. You you will -- deal you lose a bunch of sales. And and that can't be true if you don't force this laptop for sales requirements. On the dealers that are remaining."
[3:35]" Have you have you gotten any indication whether any of the real big -- ways have gotten. Letters from GM -- I mean I'm thinking locally you know the irony is Ernie box people like that."
[3:48]" I think it's entirely possible they they really said that today in terms of that territory issues if focusing on the urban areas which is where -- the big boys tend to be and in all honesty some of the larger. Dealers. Nationwide. Tend to have some of the lowest customer satisfaction numbers so -- strictly on the numbers -- what they've said we are yes you could see some of the the big names are affected by this."
[4:19]" All is said and done do you expect Ford to have to follow suit I mean we're seeing price we've seen GM could -- be next."
[4:26]" Yeah -- board has been following suit on all of the restructuring actions so yeah I think Ford could be next and Ford has very cleverly. And able to yet much of what GM and Chrysler getting with the threat of bankruptcy. Without having to have that threat of bankruptcy. -- have been very impressed with the way forward has been handling this."
[4:48]" At the end of the day when when we look at the end of 2010 what kind of an auto industry do you expect domestically."
[4:55]" We're certainly still going to have -- that General Motors I think Chrysler is still a bit more if he. I think they got to survive the bankruptcy but then you don't assume they're going to get out of bankruptcy. Before the economy has fully recovered and before auto sales have significantly recovered -- you know Chrysler has the bridge that gap between when they get out of bankruptcy and went auto sales recovered so I think we we have. The certainty of a slimmed down GM and Ford. Actually maintaining. Close to the market share that they have now and -- Ford's case I think they're going to increase. Marketshare advocate -- were looking at about 17%. To 18% going outbound. Chrysler expects that is more iffy and and Chrysler's sales may suffer more -- GM's sales Ford again we expect to increase. Its market penetration. If they can stay out of bankruptcy which we think it's a good chance they can do."
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