Chrysler’s Closings Penalize Rural Dealers
[imgbelt img=car-dealership-closings520.jpg]Of the 789 car dealerships forced to close in Chrysler’s bankruptcy, a disproportionate number are rural businesses.
On Tuesday, Chrysler ended its contracts with nearly a quarter of its car and truck dealers across the country as part of the corporation’s bankruptcy and restructuring. In an analysis of those closings and 2008 U.S. Census estimates, the Daily Yonder has found that the number of rural car dealers who’ve lost their Chrysler franchises is disproportionately high.
According to U.S. Census estimates (2008), 16.5% of Americans live in non-metro communities. But 32.5% of the dealerships losing their Chrysler franchises are non-metro.
Further, the analysis showed that Chrysler’s closings were skewed even more dramatically against the most rural communities of all (those with 10,000 or fewer residents, which the Office of Management and Budget terms “non-core”). Only 6.6% of the U.S. population lives in these most-rural communities, but 19.5%, nearly a fifth, of all the dealers Chrysler chose to close were in these non-core locations (shown in red on the map above).
On June 9, 789 dealers were forced to close nationwide, having been given less than a month’s notice. Chrysler plans to dissolve its old company and reemerge in partnership with Italian car-manufacturer Fiat; company officials argued that shrinking the network of dealers quickly was a requirement for the Fiat deal to move forward.
In hearings June 3, members of the U.S. Senate’s Committee on Commerce, Science, and Transportation challenged the closings, and several questioned Chrysler’s selection process as unfair to rural car dealers.
“What I don’t understand is how the decisions have been made, especially with respect to rural areas,” stated Sen. Byron Dorgan (D-ND).
Sen. Johnny Isakson (R-GA) said that after speaking with constituents, his “number one” question to auto industry leaders about the dealerships was “are they disproportionately being closed in rural areas?”
[imgcontainer left] [img:ruca-codes404.jpg] [source]Daily Yonder