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Saturday, May 30, 2009

KELO Runs Corporate Propaganda from Billion as News

I sure wish I could call KELO and get free advertising. (Well, they do run the Madville Times for free, which is mighty nice of them.) KELO gives Dave Billion of Billion Automotive the opportunity to assure customers that everything going on with General Motors—dealership closings, bankruptcy filing expected Monday—is good for customers. Billion also makes sure he gets to mention that his inventory is bigger than the Sioux Empire Fairgrounds and that "We're having a record sale out here" (Perry doesn't put the exclamation point, but feel free to read your own there).

Now Dave Billion does run the fifth-largest GM dealership in the country (hey! I didn't know that!), so it is perfectly sensible that Perry Groten should turn to Billion for some perspective on the industry. It's also perfectly sensible that Billion should give us the corporate spin line. For instance:
  • "The good news is with the government owning 70 percent of General Motors, it's nice to have a partner that owns a printing press that can print money, I don't think you have to worry about going broke." Forgive me if I read that as a backhanded compliment from a good McCain donor whose business was just saved by the American people.
  • On closing small-town dealerships: "I see it as an opportunity to sell more vehicles, cover broader territories and perhaps acquire additional dealerships." Small towns are such a nuisance for big businesspeople. Never mind that the dealership closings "will cost thousands of jobs, create holes in local tax bases, eliminate community pillars and create economic ripple effects across the country" [Tom Krisher and Dan Strumpf, "GM Dealers Expect Word on Plans to Cut 1,100 Shops," AP via Google News, 2009.05.15].
  • Groten reports that "Billion says GM's filing for bankruptcy shouldn't have any impact on the price of vehicles." Of course not: it's the closing of competing dealerships that will do that. The whole point of closing dealerships is to reduce customer buying power and allow GM to make more per sale independent of any changes in the actual quality of the product. This business plan makes sense in a world where there's nothing but GM... but has GM (or Chrysler) considered that by yanking their dealers from small towns, they might be increasing the chances that buyers will turn to the remaining dealers of other brands that are willing to (a) stick with the small towns, (b) beat GM's price, and (c) provide better quality?
  • Billion also takes the interesting position that GM should have declared bankruptcy sooner, to end the uncertainty for dealers and customers. That may be a valid point, but I wonder: could we argue that it is more admirable for a company to stand and fight, to do everything it can to avoid bankruptcy?
One thing Dave and I can agree on: Billion Automotive will be fine. They're big and they're diversified. But that won't help the little guys Billion is clearly eager to crush or buy out.

Update 14:55: KELO does give the little guy some air time as well. Glen Rapp of Rapp Chevrolet in Marion doesn't see closing dealers as good for GM: "Every time they eliminate a dealer, they eliminate a customer and I certainly wouldn't want to lose any of my customers." KELO says Rapp is lobbying our lawmakers to help small dealers like his open to serve rural customers who need big trucks. Hmm... Rapp must be one of those big-government Democrats....


  1. The gobbling up of auto dealers into one powerhouse volume dealer may also be influencing the other major media in Sioux Falls, the Argus Leader.

    In case you haven't noticed, the Argus Leader did away with its classified section except for weekends.

    Want to buy a pet, a car, a motorcycle? You'll have to wait until Thursday because there are no classified ads on Monday, Tuesday or Wednesday anymore.

    I called and asked about the change, thinking they accidentally left it out, but the Argus explained they did a survey that showed people only look for vehicles, pets and campers on Friday, Saturday and Sunday.

    My guess is the large dealers don't want to feel obligated to buy advertising seven days a week, along with the fact that the Argus priced itself out of the market for consumers who want to run any type of classified ad.

    Who ever heard of a daily newspaper that doesn't run daily classifieds?

  2. I'd like to blame Billion there, but ultimately it's the newspaper's fault for choosing the corporate interest over the common citizen's. Hey, that' funny: I thought the media was dominated by socialist hippie liberals...

    ...hmmm, maybe it's time to start a classified ad section on RealMadison.org...


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