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GM dealers here likely spared
Others axed
Intelligencer Journal
May 16, 2009 01:49 EST
By BRIAN WALLACE, Staff Writer

All General Motors dealerships in Lancaster County apparently have been spared the first round of cuts by the struggling automaker.

GM notified 1,100 of its 6,000 dealerships nationwide Friday that it will terminate their contracts by October 2010 in a bid to improve its financial condition.

But because the automaker did not release a list of which stores will be closed, it wasn't clear exactly who survived Friday's cuts, the first step in GM's plan to eliminate as many as 2,000 dealerships in the coming months.

As of late Friday afternoon, officials at seven Lancaster County GM stores said they had not received notification that they will be closed.

Officials at three other dealerships could not be reached for comment, and a fourth dealership declined to comment.

But Dane Whitmoyer, of Whitmoyer Auto Group, said he believes all county dealers are strong enough to have survived the cuts.

"You have a lot of good GM dealers in this part of the world, and I haven't talked to anybody who's gotten a letter," he said.

"So far, so good for Lancaster County."

Whitmoyer Group, of Mount Joy, sells Chevrolet, Buick and Ford vehicles.

Owners and managers at six other Chevy, Buick, Pontiac, Cadillac, GMC and Saturn dealerships in Lancaster County said Friday they, too, had not received letters from GM.

The automaker notified dealers via Federal Express that their stores will be closing. GM didn't send letters to dealerships that survived the cuts.

Al Keim, president of Keim Chevrolet in Paradise, said he had not received a letter as of 4:15 p.m. Friday, but he wasn't yet ready to relax.

"When I put my head down on the pillow at midnight, I might relax a little, but not until then," he said.

Whitmoyer said he spent much of Friday trying to calm nervous employees and customers concerned the dealership might close.

"Every time the Fed-Ex truck pulled up, everybody was looking out the window to see if the letter arrived," he said. "I heard somebody say it's like waiting on a death sentence.

"So far, no news is good news," he said. "It's probably one hurdle out of three we'll have to clear in the next three months."

Jeff Kelly, general manager of Kelly Cadillac-Saab, said the first round of cuts was designed to eliminate "the worst of the worst" of GM's dealers.

The decision to close the stores was based on dealer capitalization, market penetration and customer satisfaction, he said.

"In all three of these areas, we exceeded the standards," he said of his Lancaster dealership.

Future cuts will be based on stricter criteria, and dealerships that consider themselves safe may find themselves out of business, Kelly said.

"I feel comfortable that we won't be one of them, but you never know," he said.

After the second round of cuts, GM is likely to push dealers to consolidate to eliminate more stores, Whitmoyer said.

"Until GM goes into and comes out of bankruptcy, none of us will sleep well at night," he said.

Keim said the timing of GM's cuts — on the anniversary of the day he started selling Chevys 23 years ago — was ironic.

"I cashed in everything I owned in the world to buy this place," he said Friday.

"Twenty-three years ago today I was granted my dealership, and today we're holding our breath to see if we survive."

E-mail: bwallace@lnpnews.com


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There are way too many car dealers, dump the under performing ones and the others will prosper.
BigBaron55
QUOTE (BigBaron55 @ May 16 2009, 08:56 AM)
There are way too many car dealers, dump the under performing ones and the others will prosper.


A few questions...If you dump the underperformers doesn't that imply the "performers" are already prospering? WHy not let "market forces" determine who prospers? Why are they still in busines if they are not prospering? and lastly...what difference does it make to the parent car companies anyway? If they have more exposure for their product and presumably all the dealerships are "profitable" (or I assume they wouldn't last very long at all) then what affect do more dealerships have on the viability of the manufacturer? (unless they have buyback agreements like magazine distributers//) if this is the case then I can see their interest in the dealerships...do you know?
newsjunkie
QUOTE (newsjunkie @ May 16 2009, 10:02 AM)
A few questions...If you dump the under performers doesn't that imply the "performers" are already prospering? WHy not let "market forces" determine who prospers? Why are they still in business if they are not prospering? and lastly...what difference does it make to the parent car companies anyway? If they have more exposure for their product and presumably all the dealerships are "profitable" (or I assume they wouldn't last very long at all) then what affect do more dealerships have on the viability of the manufacturer? (unless they have buyback agreements like magazine distributors//) if this is the case then I can see their interest in the dealerships...do you know?
Good question- I haven't heard the answer. I know the dealers lease the cars on their lots, maybe they do send some back and what happens then? So why not just limit the number of cars sent to the dealerships or change the parameters of the deal when a car is not sold and goes back to the manufacturer?..Here's my two cents. Have big dealerships with a test track and salespeople who really know the vehicles (think of Cabelas). You can have video presentations and even lectures at these sites. Keep service at more widespread small locations, it could be farmed out but still certified... Chrysler needs to keep the Jeep/ Dodge Truck brands separate from Fiat. The small Fiats will sell here if they have a good warranty and we can be convinced that it won't cost a ton of money for parts. GM needs to sell good small cars. When we all graduated from school in the 80's and bought Hondas and Nissans, they were doomed. When you buy a Civic or a Prelude, 8 years later you'll buy another Honda or an Accura. There is actually value in bigger GM vehicles like the LeSabre or whatever it is called now, but everybody trades in their Corolla on an Avalon or a SUV. They would be more likely to buy a (?) Ranier if they had started out with a small Buick. BTW the best car I ever owned (reliable as hell, went in the snow) was an 85 Sentra that I bought for like $6500 and so I am partial to Japanese brands.
skeptic2
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