Florida's GM dealers spared the heaviest cuts while Midwest bears brunt
Wake up and good morning. Out of the 1,323 General Motors dealers targeted for elimination, only 35 are targeted in Florida. The most will come from Pennsylvania, where 90 dealerships will be forced to wind down. Pennsylvania is followed by Ohio with 79, Illinois with 66, California with 65 and New York with 60.
They, in order, are followed by Michigan with 58, Texas with 55, Wisconsin with 50, Indiana with 48, Iowa with 46, Minnesota with 39, Missouri with 38 and North Carolina with 36. Yes, 13 states face a larger number of dealer closings than Florida's 35.
GM and its CEO, Fritz Henderson (in photo from AP), have declined to name individual dealers. But it released the state-by-state list for the first time Friday to a House Energy and Commerce subcommittee. As reported by the Washington Post, lawmakers vented their frustration, demanding that GM and Chrysler executives provide even more detailed explanations of their restructuring decisions.
So Florida GM dealers should be feeling pretty good about themselves. Florida's only taking about a 2.6 percent hit in dealer closings of those 1,323 to be shut down nationally -- far less than states of more modest size.
GM CEO Henderson told a skeptical House panel that the dealer cuts were "quite painful" but necessary to preserve over 200,000 jobs at GM's remaining dealers. "In essence, this is our last chance," he said. GM filed for Chapter 11 protection on June 1 and the company hopes to emerge from bankruptcy as a new company in 60-90 days.
Using a scoring system, here's how GM said it picked which dealerships to wind down.
Overall Score: Each of the four category scores below is added together to total an overall score. Dealers scoring less than 70 received a wind-down agreement. They include:
• Sales - Weighted at 50 percent measured against appropriate average for size of market (measuring relative share performance against dealers in similar size markets in the state).
• Customer Satisfaction Index - Weighted at 30 percent measured against regional average. (GM has 5 regions in U.S.)
• Capitalization - Weighted at 10 percent measured against dealer's needed working capital standard.
• Profitability - Net profits before taxes weighted at 10 percent.
An overall score of 100 is average, GM says. Below 100 indicates a performance issue with 70 or
below indicating extremely poor performance.
-- Robert Trigaux, Times Business Columnist