ClarityBV Blog

What is the floor value of a domestic dealership franchise (i.e. blue-sky or goodwill value)?

For Chrysler dealerships, it might be $-0- (zero) or less.

• “Chrysler Group, which rejected 789 dealerships during bankruptcy, hasn’t paid for the franchises of the dealers involved. But the automaker is paying all incentive and warranty rebates due them, said Chrysler spokeswoman Kathy Graham.” (Automotive News)

For Ford dealerships, it might be $1 (one dollar) or less.

• “More than half the dealers in Ford Motor Co.’s dealer development program have purchased their stores under a plan that allowed them to buy out the company’s interest for $1, and all but two of the rest intend to do so, the automaker says.” (Automotive News)

For General Motors dealerships, it might be $450,000.

• “General Motors Co. has allotted an average of about $450,000 for each closed dealership, according to data in the congressional testimony of GM executives.” (Automotive News)

Although NADA is arguing for higher payouts, I would think many disbanded GM dealers are secretly happy to take $450,000 and run. The bigger problem may be what to do with their dealership property in this market…

The AICPA just released “A Guide to Financial Decisions: Implementing an End-of-Life Plan.” The free guide (pdf) was inspired by Hospice of Michigan and the Michigan Association of Certified Public Accountants. It is a timely topic for me, having just been in Michigan for both a funeral and a wedding.

As we all know, life can change quickly and unpredictably. Don’t leave your loved ones a financial mess to untangle! Pages 36 and 37 contain a timeline and checklist of tasks for survivors, including things the bereaved should avoid doing right after a death.

If you like music (and listening to it online), check out Pandora Radio. Just type in the name of a favorite artist and it will start mixing your custom play list! (Hat tip to Motor Trend)

According to their FAQ, the site is “powered by the most comprehensive analysis of music ever undertaken, the Music Genome Project: a crazy project started back in early 2000 to capture the complex musical DNA of songs using a large team of highly-trained musicians.”

Has me contemplating what disruptive model will “blow up” professional services as we know them…

The National Automobile Dealers Association just released its latest dealership survey data (for 2009, based on 2008 data). The 20-page report and previous year’s reports are available here.

Access to the free NADA DATA 2009 report requires submission of basic contact information. Previous years’ reports are available free and without registration. The survey indicates that the average dealership’s sales declined nearly 14% in 2008. Average pretax profit declined 45% in 2008.

These reports contain a terrific amount of data in a small package. They are essential reading for anyone working in or serving the dealership industry.

Just returned from a luncheon where a U.S. Congressman spoke about the prospects for estate tax reform. One of his key remarks was, “if you can figure this Congress out, let me know…”

There are so many other major issues on the legislative table, it sounds as though estate tax matters may be tacked onto other bills or could sit unresolved until next year.

In a funny aside, he mentioned how growing up, he dreamed he would sit on a local school board, then thought he might sit on the board of the local bank, and eventually thought he could aspire to sit on the board of a company like General Motors. In the meantime, his brother became a physician. As a Congressman now, he observed that he has become all of these!