GM plans to drop 1,100 dealerships
May 15, 2009
Staff and wire reports
General Motors on Friday told about 1,100 of its dealers — one in five — they would be dropped by late next year, adding to the economic pain radiating from the beleaguered Detroit automakers to cities and towns across the country.
Clovis GM dealership owner Bryce Bender said he did not receive a notice and wasnâ€™t aware of any in the immediate area.
There are two GM dealers in the area, Bender Dealer Groupâ€™s and Hamilton GM Country in Portales.
The general manager of Hamilton did not return a message left for him Friday.
In Tucumcari, Don Watts, general manager of Brian Urlacher Cross Country Autoplex, said his dealership was not notified of any potential closing.
Including Chryslerâ€™s decision a day earlier to eliminate a quarter of its own, about 1,900 dealerships — many pillars of their communities and heavy advertisers for local media — learned in a matter of 48 hours they would be forced either to sell fewer brands or close altogether.
The GM dealerships will be eliminated when their contracts end late next year.
While GM doesnâ€™t own the dealers, the company says its network is too big, causing dealers to compete with each other and giving shoppers too much leverage to talk down prices and hurt future sales.
Several hundred of the GM dealers knew already they were headed for closure, but most of them learned for the first time Friday. An industry group says the GM and Chrysler cuts combined could wipe out 100,000 jobs.
Clovisâ€™ Bender said Friday he is concerned about the troubles faced by Chrysler and GM but is not letting it weigh him down, and said he has a backup plan.
â€śI truly believe maybe Chrysler isnâ€™t done hackinâ€™. If I did (worry about it), Iâ€™d be a sick person,â€ť he said.
â€śItâ€™s one day at a time in this economy. ... You hold your head up and keep on rockinâ€™.â€ť
Not among Thursdayâ€™s Chrysler cuts and again left standing Friday, Bender said he believes his complete inventory of GM products, new, state of the art facility and other factors helped his dealerships miss the cuts.
Both GM and Chrysler are scrambling to reorganize and stay alive in a severe recession that has pummeled car and truck sales for U.S. automakers, which had already been losing market share to foreign companies for decades.
Chrysler LLC is already in bankruptcy protection, and industry analysts say General Motors Corp. is making its cuts now in preparation for a bankruptcy filing June 1. The company says it would prefer to restructure out of court.
GM declined to reveal which dealers will be eliminated.