If GM Goes Chapter 11: Retirees' Plight

[haha]

The main thing that will happen is rural folks are going to have to drive 30-50 miles to buy a new GM car, instead of the little dealer down the street.

I don't see how this can be limited to only that. These dealers are large local employers, important in civic and charitable events, and many of them advertise widely and actually bring in $$ from other cities and towns. If the town I lived in had lost its Ford dealer it would have been hard pressed to make that up.

Ha

 

[randyman65]

" These dealers are large local employers, important in civic and charitable events, and many of them advertise widely and actually bring in $$ from other cities and towns. If the town I lived in had lost its Ford dealer it would have been hard pressed to make that up."

You must have an entirely different breed of car dealer where you live. With rare exceptions, the ones around here are generally lying bloodsuckers.

 

[haha]

" These dealers are large local employers, important in civic and charitable events, and many of them advertise widely and actually bring in $$ from other cities and towns. If the town I lived in had lost its Ford dealer it would have been hard pressed to make that up."

You must have an entirely different breed of car dealer where you live. With rare exceptions, the ones around here are generally lying bloodsuckers.

Now there is a nuanced opinion.

 

[FinanceDude]

I was talking about the loss of employment and tax revenues the dealerships generate. For many small towns, the auto dealers are one of the biggest employers, and they spend thousands a month on local advertising and community support.

I was referring in a simplistic way how it would affect a consumer. Up here in farmville, a lot of local rural dealers are also the implement and tractor dealers, so at least they are diversified somewhat. There's a Pontiac dealer about 20 miles NW of me and they are almost done.......

 

[FinanceDude]

You must have an entirely different breed of car dealer where you live. With rare exceptions, the ones around here are generally lying bloodsuckers.

Funny, I think the folks at Best Buy and Thomasville Furniture are lying bloodsuckers, I guess I need to get out more.

 

[randyman65]

"Now there is a nuanced opinion."

As nuanced as the sales tactics of my local dealerships. I have personally dealt with precisely one dealer who did not blatantly lie to me. And I would tend to agree with FD's assertion regarding bix box electronics stores and furniture dealers. The worst, in my opinion, are the mattress stores.

 

[FinanceDude]

"Now there is a nuanced opinion."

As nuanced as the sales tactics of my local dealerships. I have personally dealt with precisely one dealer who did not blatantly lie to me. And I would tend to agree with FD's assertion regarding bix box electronics stores and furniture dealers. The worst, in my opinion, are the mattress stores.

Or replacement window salespeople..........

 

[randyman65]

And for that matter, Lasik surgeons. Why isn't there an actual listed price, no matter what your prescription? Everyone is in the chair for ten minutes, so why do some people pay more?

 

[haha]

"Now there is a nuanced opinion."

As nuanced as the sales tactics of my local dealerships. I have personally dealt with precisely one dealer who did not blatantly lie to me. And I would tend to agree with FD's assertion regarding bix box electronics stores and furniture dealers. The worst, in my opinion, are the mattress stores.

It's a tough business. But if Honest Bob's Emporium were your town's largest employer wouldn't you see some reason for it to survive?

It's an ill wind that blows nobody any good.

Ha

 

[randyman65]

Car dealerships don't create value in and of themselves. Since they're selling products, the wealth which funnels through them must first be generated somewhere else. So where does the money come from to pay the town's largest employer?

 

[haha]

Car dealerships don't create value in and of themselves. Since they're selling products, the wealth which funnels through them must first be generated somewhere else. So where does the money come from to pay the town's largest employer?

My God man, where do you get your economics? Karl Marx?

 

[cardude]

You must have an entirely different breed of car dealer where you live. With rare exceptions, the ones around here are generally lying bloodsuckers.

We are not all liars and cheats. It has gotten much harder to do business the right way and still make a little money however, so many dealers do resort to doing "whatever it takes" to sell a car unfortunately. That's one of the reasons I got out-- one of my competitors is the most unethical businessman I've ever seen, but he spends so much on advertising (lies) he actually sells a lot of vehicles. To me it was not worth it to have to lie to get someone it to the store, and then lie and bully them into buying the car. I missed a lot of busines the last few years by not doing it that way, but I sleep good.

 

[randyman65]

"My God man, where do you get your economics? Karl Marx?"

In order to have money to spend, there must be some original value created. This money typically comes from products or services marketed outside the local economic zone. Much of the money spent at a car dealership leaves the local economic zone (unless you live in Detroit or some other auto manufacturing town). While the local Ford dealership or Best Buy or Walmart may employ local residents, it requires separating other residents from their money to do so. It is nonsensical to think that a local economic area can survive simply by buying and selling things to each other.

 

[haha]

"My God man, where do you get your economics? Karl Marx?"

In order to have money to spend, there must be some original value created. This money typically comes from products or services marketed outside the local economic zone. Much of the money spent at a car dealership leaves the local economic zone (unless you live in Detroit or some other auto manufacturing town). While the local Ford dealership or Best Buy or Walmart may employ local residents, it requires separating other residents from their money to do so. It is nonsensical to think that a local economic area can survive simply by buying and selling things to each other.

Well, this discussion is running down. But BTW, by your criterion at least 3/4 of out GNP doesn't exist.

Also, to show the ulltimate silliness of your reasoning, imagine tha tthere were one world governement, and very rapid communication and movement of goods, services, information and people around the world.

Would they have to export to Mars to create any economic value

 

[FinanceDude]

"My God man, where do you get your economics? Karl Marx?"

In order to have money to spend, there must be some original value created. This money typically comes from products or services marketed outside the local economic zone. Much of the money spent at a car dealership leaves the local economic zone (unless you live in Detroit or some other auto manufacturing town). While the local Ford dealership or Best Buy or Walmart may employ local residents, it requires separating other residents from their money to do so. It is nonsensical to think that a local economic area can survive simply by buying and selling things to each other.

Ever heard of the "economic multiplier"?

 

[randyman65]

As long as one has something to multiply...

 

[Texas Proud]

Cardude... you still have to worry... IIRC if GM goes into BK, the trustee can claw back payments made 6 months prior to them going into BK... maybe a lawyer here can verify...

SO, if they did it this week, and the trustee said it was not a valid payment they would get it back...

 

[Westernskies]

Cardude... you still have to worry... IIRC if GM goes into BK, the trustee can claw back payments made 6 months prior to them going into BK... maybe a lawyer here can verify...

SO, if they did it this week, and the trustee said it was not a valid payment they would get it back...

remembering of course, that possession is 9/10 of the law...

 

[randyman65]

"Also, to show the ulltimate silliness of your reasoning, imagine tha tthere were one world governement, and very rapid communication and movement of goods, services, information and people around the world.

Would they have to export to Mars to create any economic value"

Economic value is an abstraction. Ultimately, we rely on original creation of value - production of food and other materials and value-added modifications to those commodities. The simple fact is that a closed economic system cannot exist without creating that original economic value. At the end of the day, we need to eat. If someone is not growing the food we're selling, everyone starves.

The upshot is is that we collectively produce an excess of value - we extract more from our environment than we consume. This excess of value creates a market for luxuries like a closet full of clothing, two or more cars per household, or any number of consumer goods in ours homes.

Now if a rural community has no agiculture, no industry, and no exogenous source of revenue, there is nothing to multiply - the car dealer does not add value to the local economy, but rather extracts value.

At the end of the day. someone actually has to produce something for value to be created. I think that's something a lot of people in lower Manhattan are learning now.