Wednesday, September 24, 2008

Auto dealerships getting hit hard

Everyone can say what they want about wall street being bailed out or that we shouldn't pay for their mistakes but it is becoming more clear everyday that our economy is in trouble. There is no play book to use for this crisis and we are fortunate to have two very bright and dedicated people trying to help us through this unprecedented time but Congress seems set on proving a point and trying to make things an "us against them battle" and they are trying to cover up the fact that they blew it. Here is the latest example of the widening scope of the fianancial crisis: One of the largest Chevrolet dealers in the country, Bill Heard Chevrolet, closed the doors of all 13 of its dealerships. They have been one of the top selling, if not the top selling dealers in the country for several years. The problems started about a month ago when the could not obtain short term financing to fund their operations. As credit tightened, they were put in an impossible situation with no cash flow. Auto sales are down, lease vehicle returns were clogging inventory as people unloaded low mileage SUVs for better more efficient cars. There was no way for Heard to make a change quickly enough to unload inventory and promote smaller vehicles if they couldn't get short term credit. It is just one more sign that main street is already showing signs of breaking under this "wall street" problem. It is sad to see such a highly successful operation be shut down after years of service primarily due to the credit crunch.

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