This week as a lender rep has been a new experience for me. We have had to shut down a dealer group with 5 franchises and a 4 building autoplex. They have been unable to meet their obligations with their lenders, the state, and their customers so they have decided to surrender their assets to our company and begin the liquidation process.
The process is a massive undertaking that has required many people from our company working in collaberation to protect our assets. We have had to set up security and block off entrances so that we maintain control of who/what comes in and who/what goes out.
Part of that process included allowing former employees to come into the dealership to recover their personal belongings. One thing that we had to do is make sure that they were not taking anything that was not theirs.
I had to manage this process in the service shop for one of the stores. Service techs were coming in to recover their tools from the building. I was not aware that the service techs have to provide their own tools to use while working on vehicles. In talking to some of the service techs, I learned that these tools were significant value ranging anywhere from $15k-$40k depending on the toolbox, the number of tools, and the specialization of those tools. So, these tools are an integral part of these people's livelihoods.
There was some bitterness that you could sense from the service techs as they had to gather their tools and make arrangement to ge them transported out. The logistics of moving these tools were another problem to deal with. They are in big heavy toolboxes that required trailers and several people to get them loaded on. However, most of these people remained pretty positive throughout the process and had agood outlook despite a tough economic situation.
The process I have been involved in with regards to this dealership is just one of the many signs of the times. Unfortunately, there are more people looking for work today than there was a week ago with regards to the people that were at this dealership. There a lot of aspects to look at when dealing with these situations but there is a human element besides just the business ramifications. Having to deal with that as well, can sometimes make it more difficult than anticipated.
Thursday, August 6, 2009
Wednesday, July 29, 2009
What's a Clunker ??
Cash for Clunkers, or CARS (Cash Allowance Rebate System), has created a bit of a stir in the automotive industry. It seems that it has created a lot of confusion, more than anything else. The consumer does not seem to have a good grasp of the program and it is causing some problems at dealerships when customers come in expecting to be able to cash in but walk away unfulfilled.
The program is a good concept that can potentially give a boost to auto sales, at least on a temporary basis. It can also help reduce some of the gas consumption since the new purchased vehicle would need to have a minimum improvement of 4 mpg to qualify for the $3500 credit or an improvement of 10 mpg for the $4500 credit.
There are some great deals out there but people need to be aware of the qualifications in order to take advantage of this opportunity. There is plenty of information out there to look at but some of it is not clear and some of it may not be accurate. I would recommend referring to the official government website for CARS, http://cars.gov/ for additional information and clarity with regards to the stipulations and qualifications of the program.
The program runs until November 1, 2009 or until the $1 billion allotted for the program runs out. At the time of this posting, there is $858 million in funds remaining according to the CARS website.
UPDATE: There are reports as of today, 7/30/09, that the CARS program may be suspended due to a backlog of deals in the system that have not been funded yet and the possibility that the $1 billion threshold may be reached once these deals are processed.
The program is a good concept that can potentially give a boost to auto sales, at least on a temporary basis. It can also help reduce some of the gas consumption since the new purchased vehicle would need to have a minimum improvement of 4 mpg to qualify for the $3500 credit or an improvement of 10 mpg for the $4500 credit.
There are some great deals out there but people need to be aware of the qualifications in order to take advantage of this opportunity. There is plenty of information out there to look at but some of it is not clear and some of it may not be accurate. I would recommend referring to the official government website for CARS, http://cars.gov/ for additional information and clarity with regards to the stipulations and qualifications of the program.
The program runs until November 1, 2009 or until the $1 billion allotted for the program runs out. At the time of this posting, there is $858 million in funds remaining according to the CARS website.
UPDATE: There are reports as of today, 7/30/09, that the CARS program may be suspended due to a backlog of deals in the system that have not been funded yet and the possibility that the $1 billion threshold may be reached once these deals are processed.
Tuesday, July 21, 2009
What a Wild Ride
Well, it has been a very interesting time to be in this automotive related business, to say the least. I have said that in the last 18 months to 2 years, my colleagues and I have experienced things within the business that no one else has before. The day-to-day volatility has provided for so much experience handling unique situations with dealers.
Many of the dealers that I have had in my territory have been around for a long time. All of them have never been through a time like this. Many have had to adjust to these drastic changes that include losing a piece if not all of a business that has been in their family for decades. Contrary to public opinion, which seems to have developed such a disdain for the automotive industry, many of these dealers are hard working, honest people that now face this threat to their livelihood in this shrinking industry.
Many of these dealers have been fiercely loyal to their business partners and are now being dealt an unfair hand. Unfortunately, it was a business decision that was out of our hands. My company did not have any input with regards to the dealers that had their franchises pulled, so I do not have any inside knowledge to how the decisions were made. I can speculate from what I have heard but I am not in a position to do so at this time.
These dealers have become more than just business partners to me. The relationships that I have cultivated have evolved to a point where there is a mutual interest in each others personal lives and well being. Many of my dealers expressed concern for me and my future while they were going through troubles of their own. These calls meant a lot to me and told me much more about what I had accomplished in my time here.
The relationships and partnerships contributed to why I enjoyed my job so much. I gained so much satisfaction from gaining their trust and their business. When a dealer would call to have me consult them with regards to a business decision, I knew that I was more than just a finance guy from another finance company. When a dealer would give me over 80% of his business, I knew that I had a cultivated that relationship and it gave me great satisfaction. This is what drove me to excel at my job.
The skills I have developed during my time here translate to other jobs and industries outside the automotive finance industry. I am passionate about people, whether they are business partners or subordinates that I manage. As I transition from this company into another, I hope that I will be able to continue cultivating relationships that transcend the typical business partnership. As that next door opens, I hope to be able to walk through and stay awhile like I have been able to do here.
Many of the dealers that I have had in my territory have been around for a long time. All of them have never been through a time like this. Many have had to adjust to these drastic changes that include losing a piece if not all of a business that has been in their family for decades. Contrary to public opinion, which seems to have developed such a disdain for the automotive industry, many of these dealers are hard working, honest people that now face this threat to their livelihood in this shrinking industry.
Many of these dealers have been fiercely loyal to their business partners and are now being dealt an unfair hand. Unfortunately, it was a business decision that was out of our hands. My company did not have any input with regards to the dealers that had their franchises pulled, so I do not have any inside knowledge to how the decisions were made. I can speculate from what I have heard but I am not in a position to do so at this time.
These dealers have become more than just business partners to me. The relationships that I have cultivated have evolved to a point where there is a mutual interest in each others personal lives and well being. Many of my dealers expressed concern for me and my future while they were going through troubles of their own. These calls meant a lot to me and told me much more about what I had accomplished in my time here.
The relationships and partnerships contributed to why I enjoyed my job so much. I gained so much satisfaction from gaining their trust and their business. When a dealer would call to have me consult them with regards to a business decision, I knew that I was more than just a finance guy from another finance company. When a dealer would give me over 80% of his business, I knew that I had a cultivated that relationship and it gave me great satisfaction. This is what drove me to excel at my job.
The skills I have developed during my time here translate to other jobs and industries outside the automotive finance industry. I am passionate about people, whether they are business partners or subordinates that I manage. As I transition from this company into another, I hope that I will be able to continue cultivating relationships that transcend the typical business partnership. As that next door opens, I hope to be able to walk through and stay awhile like I have been able to do here.
Thursday, July 16, 2009
Victim of the Economy
I work for Chrysler Financial, the former finance captive for Chrysler LLC. As a result of Chrysler's bankruptcy filing, GMAC is now the new captive and my employer of 13 years has become a casualty of these unprecedented times. The general public and even friends and family have many misconceptions about this event. Many think that Chrysler Financial was a part of the bankruptcy and that we are back in business now that the new car company has emerged out of chapter 11 with a new partner in Fiat.
Well, that just isn't the case. Chrysler Financial is no longer in the automotive finance business. GMAC has become the new captive due to their banking license which allows them to obtain funding for new business in a less costly manner through depository accounts. Moving on, this has put all of our workforce in a very unique situation that many of us have never faced before. There have been layoffs due to the lack of business and the fact that the company is in a liquidation mode. Having to watch colleagues pack up their personal belongings and leave the office for the last time was not a pleasant experience.
There are possibilities of the company continuing in one form or another but for right now, that's a long shot. I was offered an option for separation which I had to decline due to my personal situation; My wife and I are expecting our first child in October and, at this time, insurance benefits are a priority. So, I have been fortunate enough to be reassigned as a lender representative. Which means that I represent the company when needed at a dealership to protect any inventory or assets.
I am in this situation because I have been fiercely loyal to my job and to my company. However, I refuse to see myself as a victim of the economy. I grew up in the Chicago area, went to college at the University of Illinois in Champaign, finished my MBA at DePaul, and always thought I would never leave Chicago. Then I started working for Chrysler Financial and opportunities for advancement took me to places I have never been. I worked in six different locales in all and I would not trade my experiences for the world because they have made me the person I am today. So, again I say, I refuse to see myself as a victim and believe that when one door closes another one opens ..... I just need to stick my foot in.
Well, that just isn't the case. Chrysler Financial is no longer in the automotive finance business. GMAC has become the new captive due to their banking license which allows them to obtain funding for new business in a less costly manner through depository accounts. Moving on, this has put all of our workforce in a very unique situation that many of us have never faced before. There have been layoffs due to the lack of business and the fact that the company is in a liquidation mode. Having to watch colleagues pack up their personal belongings and leave the office for the last time was not a pleasant experience.
There are possibilities of the company continuing in one form or another but for right now, that's a long shot. I was offered an option for separation which I had to decline due to my personal situation; My wife and I are expecting our first child in October and, at this time, insurance benefits are a priority. So, I have been fortunate enough to be reassigned as a lender representative. Which means that I represent the company when needed at a dealership to protect any inventory or assets.
I am in this situation because I have been fiercely loyal to my job and to my company. However, I refuse to see myself as a victim of the economy. I grew up in the Chicago area, went to college at the University of Illinois in Champaign, finished my MBA at DePaul, and always thought I would never leave Chicago. Then I started working for Chrysler Financial and opportunities for advancement took me to places I have never been. I worked in six different locales in all and I would not trade my experiences for the world because they have made me the person I am today. So, again I say, I refuse to see myself as a victim and believe that when one door closes another one opens ..... I just need to stick my foot in.
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