Monday, December 29, 2008

EDITORIAL on Automotive News Headline: S&P downgrades five top dealer groups

No surprise there. The big dealer groups have never fully realized their potential. Sure, some have centralized accounting, etc., but for the most part they have never fully taken advantage of some of the economies of scale available to them. Lithia seems to be the exception, however they have hitched their wagon to traditionally weak brands.

Ask the big wigs at the publicly held groups and they say "our dealer operators are entrepreneurs." OK, if that is true, then why not be just a holding company with no national staff? This economic crisis has demonstrated that most GMs can't think their way out of a paper bag (more on that later).

If the big groups really want to provide added value, they would have uniform procedures, uniform vendors (even for uniforms), etc. so that one employee could be picked up and moved and wouldn't even blink.

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