There seems to be a change of heart among automobile manufacturers about the optimum size of their dealer bodies.
It doesn't help that the federal government has been chiming in on both ends of this controversy. First the administration used its heavy hand to dictate or strongly influence the size of General Motors and Chrysler dealer bodies.
But when Congress decided that it didn't like the way those companies were treating some of their constituents, its influence changed the rules.
I'm not sure that anyone making the decisions had any idea what would be a good, well-represented dealer group.
It's hard to argue that there weren't too many dealerships selling the same brands in some major urban areas. Without a profitable dealer body, it's difficult for a dealer to perform to the level that maximizes sales.
But in rural America, many dealership closings constituted a hardship on customers and undoubtedly cost the manufacturer sales and service business.
For some reason, dealerships were canceled when there might not be another selling the same brand within 50 miles. That didn't make sense. If the dealer is content with the sales volume, it doesn't cost the factory much to have representation for its customers in that market.
But now GM has relented, though the criteria for reinstatement seem as bizarre as the reasons for rejection.
Meanwhile, Chrysler Group has backpedaled on appointing new dealers, realizing the difficulty if the automaker eventually must reinstate a dealer where it has given the franchise to a competitor.
It all will get sorted out, but it's going to take time. And the threat of possible federal legislation could be a great motivator for all sorts of compromises and settlements.
Determining the placement of franchises seems much more of a black art than any sort of science. That's not always a good thing, but it is more in keeping with reality.
Some dealerships have been around so long that the population and the neighborhoods they once served have disappeared, making the franchises unnecessary or inadequate.
With strong state franchise laws, it's difficult -- perhaps impossible, short of bankruptcy -- to make necessary changes.
Bankruptcy created an opportunity that both GM and Chrysler squandered. That's a shame.
