And they’re off in the Bankruptcy 500!

Who gets to the courthouse doors first, General Motors or Chrysler? Who gets granted those first protections from creditors? Which gets to keep the cafeteria trays, corporate jets, 100-ton metal stamping machines and now-collectible assembly line jumpsuits (could be a new fashion rage locally)?

And which car owners will still have their warranties in effect tomorrow?

But perhaps more important for us all; a bankruptcy judge can invalidate, with the swing of a gavel, all the protections franchised new car dealers have between them and the car-makers, shutting-down thousands of dealerships in one fell swoop, with the car-maker not required to pay them anything. In that case, the dropped dealers will just have to get in-step with the other creditors lining-up at GM’s and Chrysler’s doors in Michigan.

Scores of Santa Monica-area dealers, many of them associated with their factories for 50 years or more, could be shuttered with no compensation from Detroit, displacing on average, according to the National Automobile Dealers Association, 100 employees-per-showroom from our local area.

Since 2000 and as of today, General Motors has officially killed Oldsmobile, Hummer, Saab, Saturn and, the very latest death, Monday’s public execution of Pontiac. The General will now focus, they say, on the “four core brands” of Chevrolet, Cadillac, Buick and GMC worldwide (again, that’s as of today — it could change again by tonight).

And at Monday’s Detroit press conference where the death knell was sounded for Pontiac by GM CEO Fritz Henderson, he made it clear that the 2,641 GM dealers nationwide which the corporation wants to cut will receive buy-out offers in their mail next month, bankruptcy court is now a “stronger” possibility for GM than it was only a few weeks ago.

Ouch. Not very subtle there, Mr. Fritzy.

According to the Automotive News Data Center, GM currently has about 6,246 dealers nationwide (Toyota, by comparison, along with their Lexus and Scion lines, have 1,461 dealers in the U.S.).

Chrysler did-in Plymouth a few seasons back, and might now be wishing they’d done the same with the Dodge name or Chrysler, too. They’d picked-up American Motors at a fire sale price ($1.5 billion in 1987) and it got them what’s now their Jewel in the Crown: Jeep, probably the most-valuable nameplate within the corporation.

What horror for our country, economy and world. Ford, meanwhile, can sit quietly on the sidelines and refuse federal money (while they’re working with Washington to open billions in lines-of-credit when necessary, with GM/Chrysler-type taxpayer-supplied loan guarantees there if and when they need them).

I’ve been re-reading Lee Iacocca’s 1984 autobiography. He details his firing from Ford after eight years as the president of that company, the only company he’d ever worked for until being shown the door by Henry Ford, then his subsequent leadership of Chrysler, then Chrysler’s descent into near-bankruptcy which forced Iacocca to beg for loan guarantees from Congress in 1979 (it’s often said “there’s nothing new in the car business,” and today’s headlines have all been seen before, though not to this extent).

The world’s economic and political situation was eerily similar then to today’s; oil was available, or not, at the whim of OPEC, gas prices were rising but not enough to force Detroit to work seriously on developing high-mileage cars (and American consumers still clamored for V8s), unrest in the Mideast, this time in the form of the Shah of Iran being asked, as Iacocca puts it, to “leave town,” and the taking of American hostages in Tehran kept the world tension high as possible for all involved.

Also like today, Iacocca, Ford and whoever was running GM blamed most of their industry’s problems on “government regulation.” Damn airbags and pollution controls! Without those and other expensive Washington-mandated regulations and standards, which raised the price of U.S.-made cars, Asian imports wouldn’t have stood a chance in the U.S. marketplace (Detroit executives said that, but even they didn’t really believe it).

GM and Chrysler leadership are both talking openly about seeking bankruptcy protection, perhaps next month, and the White House seems to be encouraging them in that direction. One immediate blowback from Detroit bankruptcies for the near-20,000 local new car dealers across the country, if Detroit fights the franchise buy-out agreements, would see thousands of lives destroyed.

If those dealers, some of which are massive corporations, but many long-time family businesses and our neighbors, lose their protections against simply being discarded by the car-makers, that will have a devastating effect on Santa Monica and thousands of other towns and cities which rely so heavily on the taxes paid by those local businesses.

In this case, even if Detroit wins, we may lose.

Steve Parker is the automotive blogger for the Huffington Post (, a consultant and contributor for the NBC-TV automotive show Whipnotic and its companion Web site (, and can be heard live and worldwide every Saturday and Sunday starting at 5 p.m. Pacific time on His home site is and his column, Tornante, runs exclusively every week in the SMDP.

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