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Thursday, May 5, 2016

Dealerships nervous waiting on GM decision

Friday, May 15, 2009

For a few hours Friday morning, Rob York felt the butterflies in his stomach.

The dealer/owner of York Chevrolet/Pontiac/Buick in Brazil and York Chevy/Pontiac/Buick/GMC in Greencastle told The Brazil Times Friday his dealerships survived a round of cuts by General Motors Corp.

The corporation announced Friday it was terminating 1,100 of its national dealer franchises late next year.

Dealers received letters via FedEx Friday notifying them they were on the list. The letters stated dealers were judged on sales, customer service scores, location, condition of facilities and other criteria. The letter also left open the possibility that decisions could be reversed.

The GM decision came one day after officials with Chrysler announced it was also cutting dealerships.

Still, anticipation of the mail Friday caused the butterflies in York's stomach to stir.

"From 8:30-11:30 a.m., I felt like I was going to get sick," York said. "I had two (employees) approach me today asking if we were going to receive a letter today. I didn't think I'd have that sort of day.

"It's a sad day when a company has to do such drastic cuts. My thoughts and prayers go out to those (who received notification). We were lucky."

York's Brazil dealership is located at 2456 West United States 40.

Bob Burkle has owned Clay County's remaining GM dealership, Bob Burkle Chevrolet, 611 Main St., Clay City, since 1999. On Friday, he said he headed in to the day like any other day.

"It's just another day," Burkle said.

Burkle said the criteria he received was "very broad."

"They left it wide open," Burkle said.

Burkle said he had talked to some of his friends in the dealership business who had received letters and others who had not. However, he would not go on record regarding the status of his dealership.

By cutting 1,100 dealerships, GM is cutting 40 percent of its retail network.

Officials with GM said Friday too many dealers is a "problem," adding they expected more cuts in the future. However, officials said they expect 90 percent of the remaining dealerships to stay with the company.

General Motors Corp. doesn't own the dealerships. However, officials with the company said with too many dealers, they are competing against each other, effectively giving the customer too much leverage in pricing of vehicles, which can hurt the company's future sales.

Officials said the moves Friday targeted "underperforming" dealers with small sales.

The cuts are part of a larger plan by GM to drop 2,600 of its more than 6,000 dealerships in an effort to restructure.

The company expects to lose sales due to the cuts, but over time, fewer dealers will mean higher profits per vehicle.

Current contracts for GM dealers run through October 2010.

York told The Times Friday his company's motto, "We're not No. 1. You are," means more now than it ever has.

"That's very important now," York said. "We need to prove them right."

The Associated Press contributed to this report.

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General Motors has responded to inquiries for the complete list by telling journalists to find out for themselves which dealerships are on the list.

To that effect, the Huffington Post is compiling a list. They are linking to news stories about closures. No Wabash Valley dealerships are on that list, at least not yet.


-- Posted by Civisi on Sat, May 16, 2009, at 5:38 AM

Can Clay County really sustain a dealership? I don't think so. Time to move into the used car business.

-- Posted by coltsbeer on Sat, May 16, 2009, at 8:28 PM

General Motors says that too many dealerships allow the consumer excessive leverage in buying a vehicle at a lower price, which can hurt GM sales. Competition may hurt GM profit, but it helps the consumer. Less choice means we all pay more for the same product. The next big change is bailing out Insurance companies. If an Insurance company is so greedy that they try to take market share by conducting poor business practices that cause the company to become unstable, does that mean taxpayers have an obligation to "bail them out"? Find out if your Insurance company is on the bailout list, and if they are, cancel your coverage and find a company that is financially sound. It is BS for the taxpayer to bail out financial giants who are greedy!

-- Posted by ucantbserious on Mon, May 18, 2009, at 8:34 AM

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