TAHOE FREAK
TAHOE FREAK
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- May 1, 2009
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were notified they would be dropped by the struggling automaker, including several in Maryland, about 1,100 General Motors Corp. dealers were expected to get the same bad news as early as Friday.
GM has about 130 dealerships in Maryland, 40 in Greater Baltimore. Its car lines include Chevrolet, Pontiac, Buick, GMC, Cadillac, Saab, Saturn and Hummer. It has some 6,000 dealerships nationwide.
Peter Kitzmiller, president of the Maryland Automobile Dealers Association, said Friday morning he had spoken with five GM dealers in Maryland, and none of them had been told the dealership was part of the closures. Each GM dealership in Maryland employs about 60 people.
The affected GM dealers were expected to be notified by letter or phone call starting Friday that their franchise agreements won't be renewed when they expire in 2010.
In the case of Chrysler LLC, which is under Chapter 11 protection, the list of dealers it plans to drop was made public when it was filed Thursday in U.S. Bankruptcy Court.
But GM, which has not yet filed under Chapter 11, says it has no plans to publish its dropped-dealer list, so it may not be immediately clear which dealers are affected.
"Unlike the way Chrysler handled it Thursday, this is a private matter between General Motors and its individual dealers," said Duane Paddock, a Buffalo, N.Y., Chevrolet dealer who is co-chair of GM’s National Dealer Council.
"The way Chrysler did it was inhumane, in my opinion," Paddock said. "Basically what Chrysler did was not very respectful of partnerships that they had had anywhere from six months to 40 years. GM is handling it empathetically, honestly and in private. It is up to the dealer to announce it if he wants to."
GM says it eventually plans to drop 2,600 or more dealerships — 40 percent of its total.
Besides the 1,100 underperformers that GM will cut, another 500 dealerships will depart when GM sells or shuts down the Hummer, Saab and Saturn brands. General Motors also has 35 stand-alone Pontiac dealerships that will go away when it phases out Pontiac by year-end 2010.
GM expects to lose about 500 more dealerships through natural attrition this year. The company has said that through April 275 dealerships will have closed as a combination of voluntarily termination and consolidations.
Five hundred to 600 other dealerships will be closed through consolidations and buy-sell negotiations.
Kitzmiller said the consolidation of dealerships would happen anyway, because of the ongoing recession's impact on automobile sales. He said the automaker will not "reduce expenses $1" by shedding dealerships.
"Our opinion hasn't change; this doens’t do anything to help make GM viable," Kitzmiller said. "In fact it does the opposite."
Kitzmiller also said the consolidation could make auto repairs more difficult for consumers who may be forced to travel farther to find a repair shop.
Like Chrysler, GM says it's suffering from an overcrowded dealer network that underperforms in terms of per-store sales in relation to Toyota and other Japanese automakers.
GM's CEO Fritz Henderson, in a conference call with reporters this week, said the process of shutting dealerships will continue for several months he but gave few details.
“We will try to work with them to affect an orderly wind down of their inventory,” he said, saying it is working out details of reimbursing dealers for warranties.
Henderson reiterated the company’s intention to sell its Saturn brand if a deal can be worked out. A number of parties have emerged, he said. The company also is negotiating with two potential buyers for the Hummer brand, he said, and still plans to wind down the Pontiac nameplate. GM's Saab brand also reportedly is destined for sale or shutdown.
About a possible GM bankruptcy, Henderson repeated, as he said several weeks ago, that a Chapter 11 filing is probable given the task and time frame under which it needs to show it can become viable.
“It is more probable today, but there is still the opportunity and challenge of getting it done outside bankruptcy,” he said.
Mark Harden is a reporter for the Denver Business Journal, a sister publication. Ryan Sharrow, a reporter for the Baltimore Business Journal, and Cathy Proctor of Business First of Buffalo, N.Y., contributed reporting.
---------- Post added at 01:09 PM ---------- Previous post was at 01:03 PM ----------
I wonder are we driving dinosaurs? I love my Tahoe, but economically things are looking so bad that GM might be over. I hate import cars. I couldn't see a world with no more Corvettes or Tahoes, you know this country has gone to hell if GM completely goes away.
GM has about 130 dealerships in Maryland, 40 in Greater Baltimore. Its car lines include Chevrolet, Pontiac, Buick, GMC, Cadillac, Saab, Saturn and Hummer. It has some 6,000 dealerships nationwide.
Peter Kitzmiller, president of the Maryland Automobile Dealers Association, said Friday morning he had spoken with five GM dealers in Maryland, and none of them had been told the dealership was part of the closures. Each GM dealership in Maryland employs about 60 people.
The affected GM dealers were expected to be notified by letter or phone call starting Friday that their franchise agreements won't be renewed when they expire in 2010.
In the case of Chrysler LLC, which is under Chapter 11 protection, the list of dealers it plans to drop was made public when it was filed Thursday in U.S. Bankruptcy Court.
But GM, which has not yet filed under Chapter 11, says it has no plans to publish its dropped-dealer list, so it may not be immediately clear which dealers are affected.
"Unlike the way Chrysler handled it Thursday, this is a private matter between General Motors and its individual dealers," said Duane Paddock, a Buffalo, N.Y., Chevrolet dealer who is co-chair of GM’s National Dealer Council.
"The way Chrysler did it was inhumane, in my opinion," Paddock said. "Basically what Chrysler did was not very respectful of partnerships that they had had anywhere from six months to 40 years. GM is handling it empathetically, honestly and in private. It is up to the dealer to announce it if he wants to."
GM says it eventually plans to drop 2,600 or more dealerships — 40 percent of its total.
Besides the 1,100 underperformers that GM will cut, another 500 dealerships will depart when GM sells or shuts down the Hummer, Saab and Saturn brands. General Motors also has 35 stand-alone Pontiac dealerships that will go away when it phases out Pontiac by year-end 2010.
GM expects to lose about 500 more dealerships through natural attrition this year. The company has said that through April 275 dealerships will have closed as a combination of voluntarily termination and consolidations.
Five hundred to 600 other dealerships will be closed through consolidations and buy-sell negotiations.
Kitzmiller said the consolidation of dealerships would happen anyway, because of the ongoing recession's impact on automobile sales. He said the automaker will not "reduce expenses $1" by shedding dealerships.
"Our opinion hasn't change; this doens’t do anything to help make GM viable," Kitzmiller said. "In fact it does the opposite."
Kitzmiller also said the consolidation could make auto repairs more difficult for consumers who may be forced to travel farther to find a repair shop.
Like Chrysler, GM says it's suffering from an overcrowded dealer network that underperforms in terms of per-store sales in relation to Toyota and other Japanese automakers.
GM's CEO Fritz Henderson, in a conference call with reporters this week, said the process of shutting dealerships will continue for several months he but gave few details.
“We will try to work with them to affect an orderly wind down of their inventory,” he said, saying it is working out details of reimbursing dealers for warranties.
Henderson reiterated the company’s intention to sell its Saturn brand if a deal can be worked out. A number of parties have emerged, he said. The company also is negotiating with two potential buyers for the Hummer brand, he said, and still plans to wind down the Pontiac nameplate. GM's Saab brand also reportedly is destined for sale or shutdown.
About a possible GM bankruptcy, Henderson repeated, as he said several weeks ago, that a Chapter 11 filing is probable given the task and time frame under which it needs to show it can become viable.
“It is more probable today, but there is still the opportunity and challenge of getting it done outside bankruptcy,” he said.
Mark Harden is a reporter for the Denver Business Journal, a sister publication. Ryan Sharrow, a reporter for the Baltimore Business Journal, and Cathy Proctor of Business First of Buffalo, N.Y., contributed reporting.
---------- Post added at 01:09 PM ---------- Previous post was at 01:03 PM ----------
I wonder are we driving dinosaurs? I love my Tahoe, but economically things are looking so bad that GM might be over. I hate import cars. I couldn't see a world with no more Corvettes or Tahoes, you know this country has gone to hell if GM completely goes away.
