NYT: Local Pillars, Auto Dealerships Teeter as Big Three Decline

[Omaha Steve]

http://www.nytimes.com/2008/11/30/business/30dealer.html?_r=1&partner=EXCITE&ei=5043


Daron Dean for The New York Times

Sales have plunged at a family dealership in Quincy, Fla.

By CLIFFORD KRAUSS
Published: November 29, 2008

QUINCY, Fla. — Bruce Thomas washed cars at his father’s General Motors dealership here at age 12, changed oil in high school, and sold his first Pontiac during college.

His commitment to a famed American industry, part business and part romance, never waned. He took over his family’s two dealerships, building a small fortune. In turn, he showered generosity on local churches, school athletic teams, charity golf tournaments and a group that helps women find jobs out of prison.

But suddenly, all of Mr. Thomas’s success appears to be melting away.

Days go by without a sale. His debts are mounting. His friends offer him cash to get by. “I’m trying to survive as a car dealer,” said Mr. Thomas, now 59, “and I don’t know if I can.”




Top executives of the Big Three automakers are preparing to return to Washington this week with business plans they hope will lead to a federal bailout. But any government help will probably come too late for thousands of dealers like Mr. Thomas who sell American brands.

They have been struggling for years, as Detroit’s fortunes waned, but what remains of their sales is evaporating along with consumer confidence and credit.

FULL 2 page story at link.

[BR_Parkway]

1. But bailing out the big 3 won't do much to get the local dealerships

moving again - if regular people don't have jobs, money or any more credit, they can't keep buying cars. New, used, foreign or domestic.

[glowing]

2. Exactly the problem. Even when we "get going" again, there won't be

businesses around to provide the things we used to buy.

[no_hypocrisy]

3. After 52 years of business, Cerami Pontiac in Paramus, NJ is going out of business.

"Collateral damage" of Wall Street.

[DainBramaged]

7. Yup, I know them, grew up with them when I worked at Konners down the block

on RT 17. :cry:

[madrchsod]

4. we have two dealers in a city of close to 18,000

one dealer has....all general motors,all chrysler,and auto/trucks from toyota.

the other dealer has..all ford,all mazda, and all volkswagen.

there used to be at least 5

[MineralMan]

5. This will finally hit home

when people find that things they never think about can't be done, like getting some sort of warranty service on their vehicle. And that's just the beginning, really.

[FarCenter]

6. The Big Three have way too many dealers

One of their big problems is that they are supporting a dealer network that is left over from when they had 80% of the market, when cars needed a lot of "dealer prep" coming from the factory, and when cars needed much more frequent maintenance.

The volume per dealer of the other companies is much higher on average.

An advantage of bankruptcy for the Big Three is that they could drastically consolidate the dealer networks by abrogating their dealer contracts, and they would not be prevented from doing so by state franchise laws.

[DainBramaged]

8. There is NO advantage to bankruptcy, NONE.

[FarCenter]

10. GM needs to eliminate several brands and 2/3 of its dealers

Specifically, Pontiac, GMC truck, Saturn, Saab need to go.

So all those dealerships need to be eliminated. But a lot of Chevrolet, Buick and Cadillac dealers need to be consolidated as well.

How can this be done without bankruptcy?

Eliminating Oldsmobile was hugely expensive.

Ford needs to close Mercury, and Chrysler needs to close everything but Jeep.

[Donnachaidh]

9. had a huge chevy dealership go out of business just recently

They were the ones who ALWAYS advertised, ALWAYS seemed to be doing a strong business. Then they got into a nasty lawsuit when they talked a mentally-disabled man into taking out a loan on a huge truck at a whopping 28 percent interest. They were ravaged by bad press and lots of activists picketing their business.

Poof! Gone. And the ripple effect started on all the other auto dealers. Many of them are just squeaking by till January.

[eilen]

11. Our closest Saturn dealer closed/merged with the one

located in Syracuse. I think they were an offshoot of the one in the city. I'd rather they be in the city to be honest, they need the taxes as the schools there are sorely in need. Plus it is good that we still have "Automobile Row".