Someone needs to explain how Tator's Dodge (or any small Dodge dealer for that matter) costs Chrysler money if they sell a relatively small amount of vehicles.
That is one way to look at it, and a true statement from a purely technical standpoint.
However even though that is one way to look at it, that is not the way Chrysler looks at it.
I've never been a car dealer so I can't speak to the specifics of the contractual language in a dealer franchise agreement or license, but, from what I know of most deals like this, I can hazard an educated guess.
The way Chrysler looks at their dealers (especially now) is no different than how any car dealer looks at their sales people. Same dynamic, just shifted further up the chain.
If you’re a car dealer employing 10 sales people, and they are all doing well, you keep them all on board. If after a number of years, a couple of them start to sell very few cars, well eventually they will be fired will they not?
I know some people that worked as salesmen at car dealerships, and from what I remember in some cases they were on straight commission, no base pay whatsoever. So imagine you've got all these sales people on straight commission, and a couple of them aren't really selling any cars, even though they're on straight comission, after enough time goes by - what would you do?
Initially you would talk to them, you would ask them what's wrong and how maybe you can work with them to get them to do better, or you may just leave them be hoping they realize the importance of PERFORMANCE and turn things around themselves, and remind them of some piece of paper they signed when they were 'hired' that stated that 'In order to maintain your position as a salesman at Bob's Car Dealership, you need to sell a minimum of XX cars average per month [or per year, or whatever'].
So with that said, if those sales people consistently barely sold any cars, or no cars at certain points, would you keep them on at the dealership? Imagine they were the great-great-great grandson of a family that for generations had worked at your car dealers as sales people, father to son, to son, etc.
You would give them more leeway, you would let them slide a bit longer than anyone else, but eventually wouldn't you let them go? Because the alternative that even though this person isn't 'costing you any money' he is technically, under the terms of your agreement with him, supposed to be selling a certain number of cars, and he has not been doing that, for quite some time.
Now that same person may bring a lot of publicity to your dealership, he may have great public relations skills, and have lots of friends who have all owned a bought cars of that dealerships brand, and that salesman may even be great and steering people towards the dealership's SERVICE DEPARTMENT to get the car serviced.
But over time, that person really isn’t' a salesman anymore. If that person want to work promoting the car dealer's brand, he should go start a PR company and get the dealer or manufacturer to hire him. If he wants to strictly deal with service dept issues he should go become solely a mechanic or a service advisor. But having signed a piece of paper that says 'I am salesman and I agree to perform to this regimen of performance' and then not doing so, eventually that guy is going to get the boot.
Having the guy standing around on the sales floor waving the dealer’s flag and being a great human being and sending people to the service dept while somewhat PERHAPS benefiting the car dealer, and TECHINCALLY doesn't 'cost them any money', it simply doesn’t constitute the agreed and hired role as salesman.
Perhaps the car dealer is owned by an old man that was friends with that salesman's many generations of family that have worked there and is sympathetic and keeps the salesman there for posterity, but then the owner dies, and his brash young son takes over ownership of the dealership. The first thing the son does is say 'Okay, we're going to make some changes here and do things my way, and the first thing we're going to do is review the performance of all the salesmen, and whoever isn't performing to spec is going to get the boot'.
Get the picture? Take the whole above and translate it to Chrysler as the dealership/owner, Tator as the salesman, and Cerberus as the brash young son. Ever see the film Glenngarry Glenn Ross? Baldwin's character is Cerberus, coming into kick butt and shake em up. A memorable quote from the film when Baldwin sits all the salesmen down Baldwin tells them, "Nice guy? I don't give a sh*t. Good father? F*ck you! Go home and play with your kids. You wanna work here - close sales!"
So even if that carsalesman's family and friends stage a protest with phone calls and emails, and walked around wearing t-shirts saying ‘save Steve the salesman’, while the owner maybe sympathetic – nothing anyone says or does is going to change the simple facts that: The owner runs a car dealership, sales people who want to work there have to sell cars to the performance mark, if they don’t – they won’t be salesmen there anymore, end of story.
At the bottom line, even though it may not technically 'cost Chrysler money' to keep Tator on as a dealership, if Tator has an agreement with performance parameters that are not being met, eventually in time they're going to cut the ties, especially when a takeover and a big management change happens at the top.
If Tator has a unique and special relationship with Viper community and can promote Chrysler and Viper in some unique way, he should start a PR division and sell his services to Chrysler. But doing those things under the guise of being a licensed/franchised Chrysler dealer when not performing as mandated, doesn't fly, and that's how Chrysler looks at it. They probably see it as some kind of gift to be a licensed dealer and see it as if/when the dealer isn't holding up their part of the bargain they won't be getting all the benefits of such anymore.
You wanna be a licensed dealer - you have to perform to X specification. If you want to work on cars, start a performance shop like Heffner or DC Performance. Neither Heffner nor DC Performance are licensed car dealerships. Why? Because they don't sell any cars, they just fix them. Just because a long time ago you once sold lot of cars, well eventually the long time fades and you have to deal with the right here and now.
Also I don't have an MBA, not even close. I learned it all from experience. I dropped out of college 15 years ago to start my own company, and the only thing constant in business is change. Constant redefining and re-definition, upgrading and refining, always pushing for higher goals, higher productivity, higher revenue, better ROI, that is the language of these big companies, and I work with many. If I was to sit around and do the same things at the same level and perform at the same specification, or less, year after year, my business would be toast.
I know that's not the old school way, but it's the way things are today, for good bad, ethical or not, right or wrong. You want the luxury of owning your own business and controlling your destiny instead of showing up for work somewhere else and someone else being your boss and telling you what to do, while collecting your happy paycheck every Friday, you've got to be really really crafty, innovative, and higher-performance oriented, year afte year. Just doing a good job and providing good customer service are for people that WORK at business, not that own them,
at least if the success of your own business hinges on being forced to deal with big businesses that see things in these terms, which is just about every big billion dollar bohemoth. I mean really READ what their Chryslers emails say:
Innovation has always been a driving force at Chrysler and it drives us
towards improvising and changing for the best. You can be rest assured
that this change is one of them.
Keywords: Innovate, Improvise, & Change.
In summary I don't think Chrysler is trying in any way to shut Chuck Tator's down. I think they're simply not going to let Chuck order any cars unless he's going to order how many they say he needs to or has agreed to in order to stay a Chrysler dealer. Chuck has a million options as a business owner to keep his doors opens without Chrysler's blessing. Chuck should Innovate, Improvise, & Change and not give a rat's ass what Chrysler thinks or says.
