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GM cutbacks to shutter some Tampa Bay dealerships

The announcement by General Motors that it would trim 1,000 to 1,200 under-performing dealerships on top of more than 2,000 Pontiac locations was met on Tuesday with grim resolve by local dealers who say they can last in the survival of the fittest ordeal ahead of them.

About 25 local GM dealerships provide more than 1,000 jobs and millions in sales taxes, but not everyone will outlast the latest shakeout. The company told dealers on Tuesday that factory representatives will start notifying doomed dealerships on May 11.

Company spokeswoman Susan Garontakos said GM will rate dealers on sales performance, capitalization, potential profitability, size, image and customer satisfaction. After that, she said, the company will go market by market and determine which dealerships are not meeting the terms of their franchise agreements.

"There's a lot of things that we have to consider, but we'll have talks with those dealers that show or haven't demonstrated that they have maintained a good performance," Garontakos said.

Ed Morse Cadillac at Florida and Fletcher avenues in Tampa aims to survive. Its adjacent Saturn franchise will, like the rest of the GM division launched with such fanfare 20 years ago, either shut down or be absorbed by another automaker. Hummer also likely will be sold.

"With so many retirees it's a real strong Cadillac market. Cadillac won't go away," said general manager Steve Barger, who survived the dissolution of Oldsmobile earlier this decade. "But Chevy stores are thick on the ground all over the U.S. Which ones will go away? We don't know."

Tom Castriota of Castriota Chevrolet in Hudson has no plans to vanish. He's among the top sellers by volume of Chevy cars in Florida and usually exceeds GM's minimum quota by three or four times.

"I'm confident — and most of the dealers in Tampa are confident — that we won't fall into this closing situation," Castriota said.

Pontiac is first on the chopping block, following Monday's announcement by GM. Pontiacs are sold at 2,627 dealerships, only 27 of them stand-alone. Most of the rest, like dealer Roger Rivard, also sell Buick and GMC vehicles. GM will introduce a couple of new Buick models to partly compensate for the loss of Pontiac's better selling brands like the Solstice.

As one of the Tampa Bay area's six Pontiac dealers, Rivard didn't bother to tune into a downbeat video conference with GM executives Tuesday. He had cars to sell.

"I don't even keep the news on at the dealership anymore. As a car dealer your attitude is everything," Rivard says.

John McEleney, chairman of the National Automobile Dealers Association, said in a written statement that GM must treat all of its dealers fairly and that those that close should be compensated.

Local dealers said GM has promised to buy back cars and auto parts, but won't make any additional payouts.

Rivard expects the bulk of dealer closings to happen outside the Sun Belt. Castriota agrees. His family also runs a dealership in Pittsburgh and watched its three closest competitors go out of business over the past year or so.

"The Northeast and Midwest, that's where most of the over-dealing has been," Rivard said.

GM expects to lose 500 Hummer and Saturn dealers when those brands close or are sold, and hopes another 400 will close voluntarily. Another 500 would be merged with other dealerships.

The Tampa Bay area has about six Saturn dealerships. New Hummers are sold at two places: Dew and Reeves.

Overall, GM will reduce dealerships by 42 percent from 2008 to 2010, cutting them from 6,246 to 3,605.

GM is living on $15.4 billion in government loans and must meet a June 1 government deadline to restructure, win concessions from unions and cut debt. If it misses the deadline, it will file for Chapter 11 bankruptcy.

Information from Times wires was used in this report.

GM cutbacks to shutter some Tampa Bay dealerships 04/28/09 [Last modified: Tuesday, April 28, 2009 11:26pm]
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