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Ellen Belcher is the Dayton Daily News opinion pages editor. She writes about state government, education, the environment, higher education and all things Dayton.
Martin Gottlieb is an editorial writer and columnist for the Dayton Daily News opinion pages. He focuses on the political process itself and does such national issues as war, the economy, taxes and Social Security, as well as a hodge-podge of local and state issues.Home > Blogs > A Matter of Opinion > Archives > 2009 > June > 21
Sunday, June 21, 2009
Editorial: Let market have its way with dealerships
Even before the federal auto bailout, critics of the Detroit automakers — especially of General Motors — were saying the companies had too many dealerships. The word “bloated” was used a lot.
Once the bailout happened, the views of the critics became powerful. When President Barack Obama embraced his predecessor’s bailout — and ultimately enlarged it — he felt he had to show that he was not simply throwing good money after bad. He had to foster dramatic change in the auto industry: fewer dealerships, fewer models, better gas mileage, better deals with unions, more economy generally.
Now GM has targeted 1,300 mainly unidentified dealerships for elimination by late next year. Ohio has 79 of them, more than any state except Pennsylvania. Harmon Cadillac of North Main Street in Dayton has announced that it is one. Rose Chevrolet in Hamilton is another.
Chrysler is on a faster track, having notified hundreds of dealers that it is no longer dealing with them, including Salem Chrysler Jeep, one of 47 in Ohio.
Strong as the case is that there are too many dealers, however, the case is stronger that the marketplace should be allowed to do the sorting out over time, rather than having every case decided from above this year and next.
GM has already lost about 2,000 dealerships in this decade, though it still has far more than anybody else, at about 6,000. Ford is also dropping gradually; it has 3,700. Chrysler had 3,200 before its bankruptcy.
Chevrolet alone has about three times as many dealers as Toyota, but sells roughly the same number of cars.
The dealerships argue that they don’t actually cost the auto companies serious money. The dealers buy their cars, own their property and pay their own overhead. So why worry about there being too many dealers?
The auto companies now say — along with their critics — that GM dealers end up splitting the GM market too much and having too little money. A GM vice president said that a typical dealer for a foreign competitor “has more money to invest in their facilities, in their people, in training, in the customer, in advertising, and that puts us at a competitive disadvantage.”
Often left unspoken is that competition among dealers tends to reduce prices that customers pay, if only a little.
By the same token, though, the competition — which results in much advertising — should result in the sale of more cars overall, at least theoretically.
All things considered, the case is not compelling that auto industry survival depends upon sudden elimination of thousands of dealerships.
Moreover, closing dealerships will add to the short-term problems of the economy. Many thousands of people will lose their jobs. Governments will lose revenue. Communities will lose the involvement of the dealers. (And, it should be noted, newspapers — and other media even more so — will lose advertising revenue.) If the dealership network of GM is “bloated,” that’s substantially GM’s fault. The company is now taking advantage of government pressure — and looming bankruptcy proceedings — to get out from under its own mistakes.
Some industry analysts say it must do that, because auto dealers have major political power at the state level. Ohio is among the many states that protect various kinds of franchises. In some places, closing a dealership can cost an automaker $500,000. Federal proceedings can be the way to get around state protections.
Now the issue is being thrashed out in Congress.
With dealerships disappearing anyway, the best course now — the best bet for a relatively painless transition for communities around the country — would be to neither prop up the dealers artificially at the state level or put them out of business artificially.
Best, in this case, to let economic nature take its course.
Permalink | Comments (11) | Post your comment | Categories: Auto industry, Economy, Editorials, Martin Gottlieb
Scott Elliott: A Father’s Day message: Don’t wait to mend fences
A work trip to Ohio for my father should have been a sign something was up. Europe, Asia, South America — that would have made sense. But here to Ohio?
Dad was a world traveler. After he died on the last day of March, the tributes began rolling in from every corner of the globe. Japan, Brazil, the Czech Republic, Israel, India, Ireland, China, to name a few. My mother has stacks of letters and e-mails from dozens of countries.
At a memorial service this month at the University of California, Riverside, where he taught American literature the last 20 years, 17 speakers told 200 in attendance even more tales. Listening, I searched for my own story, my unforgettable moment, the big thing he did for me. I found it a decade or so ago, during that unexpected Ohio trip, driving back to Dayton from a gig he engineered at Ohio Wesleyan University.
All my life, Dad was busy trying to change the world. That’s what he thought he was hired to do as part of a wave of new and different faculty members at Princeton University in 1971, when I was three. Princeton then was very much for the white, Anglo-Saxon, Protestant and wealthy guys. Dad used to like to say he was an “affirmative action” hire. There weren’t too many others like him — a Catholic truck driver’s son from inner-city Baltimore.
He became something of a star in his field, pushing Princeton to become more open to diversity and trying to raise the profile of women, minority and contemporary writers through his scholarship.
When the Berlin Wall fell, Dad saw a golden opportunity to spread American studies to places where it had been ignored or forbidden. Through the American Studies Association, he helped establish and nurture the study of American literature and culture across Eastern Europe and then in other parts of the world.
Like many successful people, Dad was renowned for his incredible work ethic. I’ll let you in on a little secret. What that really means is high achievers have to spend a tremendous amount of time working and have to take on a lot of stressful responsibilities. As a father myself now, with children and a mortgage, I understand this in a way I simply couldn’t at 17. The heavy focus of Dad’s attention on his work added to the inevitable coming-of-age, father-oldest son tension, and made for some very difficult years.
Still, by the time we got in that car for the ride back to Dayton, we were cordial. Ohio Wesleyan is a distinguished, old-school campus in a small, leafy burg. It reminded me of home.
Pulling out of town, we reminisced about Princeton until the conversation lulled. At the pause, he began, “There’s something I need to say. You know, I know things weren’t always great between us back then, and I just wanted you to know I am really sorry for that. I hope you can forgive me.”
After another pause, I managed to spit out that I had forgiven him long ago, but that the tough times were a two-way street, so I needed him to forgive me, too.
Only later it all came together for me. That trip wasn’t about Ohio Wesleyan. He was there for that car ride home. The whole purpose of the visit was so he could say those words to me.
It was slow and gradual, but over time that brief conversation had an impact. Awkward handshakes eventually became warm hugs. Conversations became more personal. After a while, parting even sometimes concluded with “I love you.” Those words, in fact, were the last we spoke to each other two days before he died from a heart attack.
I have to say now that I wish we’d had more time. I wish he’d gone at 96 or 86 instead of 66. I wish I could pick up the phone right now, punch the numbers, and he’d be there. But I’m grateful the last decade wasn’t clouded by old grudges and that we were able to get to “I love you.”
Permalink | Comments (0) | Post your comment | Categories: Columns, Scott Elliott
Kevin Riley: Ohio must convince grads to stay
There’s been a lot of talk about what industries hold the key to Ohio’s future. As traditional manufacturing continues its long painful slide in the state, there are plenty of opinions about where Ohio should cast for its future.
Whatever your opinion on that, Ohio has one industry — if you call it that — within which it has undisputed strength: higher education.
Ohio is home to nearly 200 degree-granting institutions enrolling hundreds of thousands of students.
(Only California, New York, Pennsylvania and Texas have more schools.)
Here’s the problem: Ohio is exporting this product (college graduates) instead of keeping it here to build its economy.
So when another report about Ohio’s “brain drain” — shorthand for students who graduate and leave the state — came out last week, you might have been tempted to dismiss it as the latest bit of bad news about that topic.
But the report issued by the Thomas B. Fordham Institute, “Losing Ohio’s Future,” highlighted opportunities the state has to convince college graduates to stay.
Steve Farkas, of FDR Group, which conducted the research for Fordham, briefed community leaders and emphasized those opportunities.
His research involved students at seven of what he called Ohio’s “best” schools: Case Western Reserve, Kent State, Miami, Oberlin, Ohio State, Ohio University and the University of Dayton.
Here’s the good news: Students like Ohio. More than 60 percent think the state is an excellent or good place for them to build a future.
The bad news: Most plan to leave Ohio after school — especially those who aren’t native Ohioans (79 percent).
Typical of the challenge the state faces is Jennie Szink, a Michigan native who is a recent University of Dayton graduate and an intern here at the Dayton Daily News. One good way to convince students to stay, Farkas said, is to get students connected to the community at large — through internships and other jobs. That happened with Szink.
She said that having an internship and other experiences while a UD student “made her feel a part” of Dayton.
One of the problems is that Ohio college students rarely leave campus, and some say that their schools don’t do a good job connecting them to opportunities.
Not true with Szink, who said she was aware of a number of local efforts to do so and has spent time attending events around Dayton. She’s been to the Schuster Center, local festivals and Dragons games.
Locally several groups are addressing this connection issue. For example, the Downtown Dayton Partnership leads a “Campus Connect” program to expose local college students to the amenities of the region. And the city has its “Summer in the City” program for those students who are spending their summer in the area.
But Ohio has some problems with its college students. Close to half say the state’s image is bad among people outside the state. And there are large gaps between what these students want — good job and career opportunities, an exciting and fun place to live — and their view about what Ohio offers them.
Back to Szink, who feels differently. She’s from a small town in Michigan, and wanted to stay in Ohio. She said she believes there’s plenty to do here.
But her peers chided her for it. “They made fun of me … asking ‘why would you want to stay in the Midwest?’” she said.
There are many efforts under way to change that kind of perception of Ohio and the Dayton region. Efforts on that front include recreational developments and revitalizing the city’s urban core.
But a student who has a positive experience here — outside the campus bubble — is someone we ought to be able to convince to stay.
The Fordham research suggests that tax credits for staying here and grants toward down payments on homes were among incentives students liked.
But in the end, the students will need jobs. Some are willing to move to a city, and then find a job — but not so with Szink.
She’ll be going back to Michigan, where she’s landed a job at a weekly newspaper near her hometown.
And therein lies the dilemma for this region and the state — one I experienced firsthand. We had a chance to keep her here, but like many local companies, we haven’t been hiring many people during these tough economic times.
It’s a tough call, and I can’t be sure whether we made the right one. But I hope we’ll get Jennie Szink back some day soon.
Permalink | Comments (3) | Post your comment | Categories: Columns, Economy, Kevin Riley
