I’m a little taken aback as to why everyone is so surprised (including the dealerships of Chrysler and GM) as to the path that the government took and the abominations of approving GM’s bankruptcy. Politics rule and the guy with the most commodity hooks wins. When Henry Ford started selling Model Ts to the world, he made every dealership pay for the cars up front. Wheels for the World by Douglas Brinkley exposes the serious ugly sides of Ford, Sloan and others who set this model in place. Each dealership was required to scrape up the money and pay Ford up front for the cars before they were ever assembled. The Dodge brothers actually sold Ford the majority of the parts to assemble Model Ts for the first several years. When Henry went to manufacturing everything, the Dodges’ built their own brand and were later snatched up by Chrysler. There was no financing and no credit for either Ford or for the dealerships or for the buyers of the vehicles. All purchases were cash on the barrel head. When Henry needed more design money or development money, he found ways to pass this onto the dealerships in creative ways. What could they do? They had no recourse due to the fact that Henry was the only one making affordable cars. When Alfred Sloan saw how gullible the dealerships were, he followed suit and thus you have the predatory and abusive model of the franchisor in its genuine origin (Singer is credited with the original idea of franchising). His claim to fame was the origination of financing (GMAC) so the common man could afford his overpriced vehicles (Model Ts were $750 at their highest and $275 at their peak, while GMs were usually 2K or higher) and pay even more for them (interest plus principal). Do you realize that the banking and Wall Street relationships were started then and have resided among these families and elite circles for all these years? (And Obama isn’t going to upse that apple cart without the risk of losing his $60,000 dates to Broadway and his $300,000 photo-ops over NYC.)
Now that GM has found a way to use a company owned dealership (took it over from a franchisee after they failed – hmmmmm) in Harlem to accelerate its bankruptcy proceedings (NY is known as the swiftest), it allows them to simply thumb their noses at dealerships in the name of saving General Motors. Can anyone explain why we want to save such a poorly run obese corporation which makes supremely inferior products with the lowest resale value since the Yugo? And is there any reason we should feel sorry for a company that has gouged the masses for a hundred years?
Franchisees, you haven’t a chance in hell of survival when a franchisor can make every business decision, arbitrarily charge you royalties and put those monies in its pocket without having to answer for them and then use them to defend itself in the courts when you are disadvantaged or claim abuse. When will you wake up and understand that franchising is just a license to use your money to build their kingdom? Get the hell out, run your own business, make your own decisions and watch your profits go up. We need to go back to used cars and Japanese cars that don’t fall apart in two years.
Bloody
Bloody Franchise 
Of course, franchiSEES don’t do very well when their franchisor becomes insolvent. It appears that law and regulation is designed to protect the franchisors in the “restructuring” and “reorganizing” of the franchisor after insolvency.
All of the stakeholders take a hit but some more than others (as is playing out now in the News) with the view that the “greatest good” is defined as the survival of the franchisor as a new entity, who, when up and running, will work toward an IPO
But! President Obama didn’t think up franchising or promulgate the rules and regulations surrounding insolvency in bankruptcy. He inherited an unprecedented problem that demanded action of some kind immediately and that could only be solved with laws that are already on the books and the use of these laws.
The “Kingdom” of franchising that favors and insulates the franchisors is protected by the status quo of the law.
What should really be a concern of BF and others is the securitization of IP in the retail sector where the big retail brand franchisors can get better credit ratings to borrow money based on the collateral of their portfolio of franchise contracts by pretending to conduct “true sales” of the franchisees’ contracts and royalties to third parties.
The securitization process and the improved credit rating appears to be based on the premise that the franchisor will always be reorganized and restructured and never liquidated and that the “receivables” from the franchisees will never be part of the franchisor’s bankruptcy estate.
This somewhat new practice started in 2000 and gained steam and puts Mom and Pop franchisees at even greater risk than before. Rules and Regulations have been passed, as needed, to accommodate the securitization of IP, which demonstrates the power of big business franchisors in our economy. This is the way of things on the American scene.
Actually, I like my Ford and would hate to see American Automobile Manufacturers disappear. Henry Ford did help to put a chicken in every pot and a Ford in a lot of garages.
Carol,
Ford was nothing but a pig. He had the right idea, but by driving the prices down, he hurt the entire country and it still has residual effects today! Study your history before you make a rediculous statement that lets Ford off the hook or glorifies US auto manufacturers. Jim Press is threatening dealership families and assets when they don’t buy inventory to save his sorry ass with Chrysler. He did this on live conference calls. Carol, you are speaking form naivete and lack of knowledge. Do your homework before you spout off and speak well of someone like Henry Ford who purchased his own newspaper so he could slam the Jewish population because they had an edge over him in money and business. Ford was an anti-semitic and disloyal to the very people that helped him become a very wealthy and prominent business entity. Many of the smartest people who worked for him, left him to work for others because he no longer needed them once he had an assembly line full of foreign workers who were guarded with an armed police force of 300 men in the factory at its peak. Great company?
You are so naive to think Obama is clean. He’s as crooked as a chicken wing and a puppet of pomp and circumstance. He’s dealing with things no different than Reagan or Bush or any of the other puppet Presidents of the US. They take a snapshot of the situation, make an educated guess with influence from lobbyists and biased sources (the elite who have stakes in the franchisors) and then make decisions that often further injure the industry. You think that logic will work? Oh how naive you truly are!
Bloody
Bloody!
I voted as an independent and for Ralph Nader until the last election, when I voted for whom I felt would be the best leader in these very “hard times.”
Perspective is everything to the individual and obviously you and I don’t share the same perspective on history and, thankfully, I am not as angry as you are about a past that cannot now be changed.
Yes, I believe that President Obama is “clean” or at least as “clean” as any public official who is only electable through the path of machine politics —The Republican Machine or the Democrat Machine.
Just what would you have advised President Obama to do if you had this opportunity, Bloody!
I still like my Ford!
Carol
Not a single President has ever been clean. Wake up and smell the dung Carol. Money makes the world go round and politicians are puppets of those who possess the money.
On a second note, Obama is a bloody lawyer – there is no lower form of business professional these days and now he’s president? Ugh!
Bloody
I agree! I thought I would never be able to vote for a “lawyer” to be President. There is no doubt that the big money firms in the ABA have been working for the Corporations and the special interests in terms of making law that favors the special interests.
But! I think President Obama, because he is an attorney, can see immediately how law and process has been shaped to always maximize the profits for those on top of the pyramid. I think he wants to change the “rich get rich” and the “poor get poorer” cycle we have been in these last many years. This is why he was elected by the American people!
He can’t, under our Constitution, by Executive Order, change the law that now exists and has to work within the law, as it now stands, to change the law and to make the changes that he promised to the American People.
I assume, Bloody, that you are indicating that a Republican President would do no differently and that the “system” is broken.
But! what is the point of criticizing the current administration who is JUST STARTING to try to make change and to try to keep our financial system afloat? What President has faced the worst crisis since the Great Depression in the financial markets, and two wars, one of which has lasted longer than the great World War II?