Much has been recently written on the closings of a number of automobile dealerships throughout the United States, and in particular in the San Francisco Bay Area. With the closings has come much pain for all those associated with them, including customers, employees, owners, suppliers, and the like.
Having said this, a question that can be asked is whether or not there is any "silver lining" in this situation. At first blush, one might say what a ridiculous question. With customers having to relocate to different dealerships or find other places for service opportunities, with confusion as to warranty and other maintenance concerns, with traditional and ongoing relationships being severed, as well as a myriad of other related issues, it could be said that the thought of any sliver lining with these dealership closings is thoroughly ridiculous.
In general, a key element of any dealer-customer relationship is trust. This is particularly true when such a relationship relates to service aspect of a vehicle. The superiority of the servicing of vehicles can vary from dealership to dealership, and in those dealerships that have been closed that had superior trust relationships, such closings can be devastating to the customer.
But once again we return to the question of do these closings have any "silver linings." It can be argued that such closing may have the opportunity of unintended consequences of enhancing increased service capacity at a lower cost than was available prior to such closings. For example, dealer service labor rates are quite high in general. If a dealership closes and its service department closes as well, which is usually the case, where will their former customers service their vehicles?
We believe that as choice becomes a more prevalent issue for customers in a variety of industries, the same can hold true for vehicle service. In this regard, we can see a whole new entrepreneurial output of service shops being spawned out of these recent dealership closings. Such shops may well provide superior service and a lesser cost. In his book "
The Long Tail,"
Chris Anderson asserts that the "future of business is selling less of more." In this respect, what we might see is a number of very specialized vehicle service firms locating near one another and enhancing one another, thereby not trying to have a one-size-fits-all model when it comes to auto service.
For many, the American Dream is to be in business for oneself. For those mechanics and service technicians that have been laid off as a consequence of dealership closings, some will certainly find work with other entities. However, for those with high skills and training that they have gained at these dealerships, and for those with a desire to have their own business, it can be asserted that there has never been a better time to start their own business since such closings open the possibility to start a business in a growth field, in that Americans appear to be servicing their cars and owning them longer, rather than buying a new car every few years.
In the
Oakland Tribune, Gilbert Zamora was quoted as saying that "GMAC is forcing a lot of dealers out of business." The
Wall Street Journal reported that the "National Automobile Dealer Association estimates the closings will add 6,800 people to unemployment." Or, for those who are trained mechanics, is this a time for a new entrepreneurial explosion? For example, many dealerships are auctioning off equipment such as car lifts and other valuable and specialized repair tools at a fraction of their original value. Accordingly, it is possible that those who have dreamed of opening their own business could do so now, particularly in the automotive service area.
One area where the closing of dealerships has proven to be helpful is at the
Brentwood Business Center in the Northern California City of
Brentwood. This community is characterized by synergy among the many new automotive uses that are able to promote one another. In one location, one finds a tune-up shop, a transmission shop, a car stereo facility, an accessories store, as well as a number of classic car restoration firms. Each of these facilities feeds off of one another, and each is able to provide superior service at generally less than what would have been the case in a higher cost dealership situation.
