Make us your home page
Instagram

Tampa Bay GM dealers might avoid the automaker's ax

Friday was D-Day for 1,100 General Motors dealers told they might close as early as this month.

But as of Friday evening no Tampa Bay area GM dealers had confirmed they were on the hit list.

In fact, Chevrolet dealers across the region assumed none of their colleagues and competitors would get the ominous certified letter from the parent company.

"We were told in a conference call that Pinellas County dealers were rock solid," said Bob Towler of Maher Chevrolet in St. Petersburg. "This first round of cuts was really for dealers not living up to their franchise agreements."

Castriota Chevrolet in Hudson, Dick Norris in Clearwater and Ferman Automotive also seemed to have ducked the firing squad. Ferman runs three GM stores in and around Tampa. Dick Norris runs two, in Clearwater and Palm Harbor.

"Every dealer feels like we just got over a hurdle," said Tom Castriota of Castriota Chevrolet, which employs 90. "Employees certainly feel more comfortable. And customers wanted to know if we were going to be here Monday."

Close to bankruptcy, GM said it's targeting "underperforming" dealers with small sales volumes stuck in uncompetitive markets. Nearly 500 of the dealerships targeted for closing sell less than 35 new GM vehicles a year, said Mark LaNeve, GM's vice president of North American sales and marketing.

The average Toyota dealership sells almost 1,300.

"Too many dealers, in actuality, are a problem," LaNeve said.

Unlike Chrysler, which on Thursday published a list of nearly 800 dealers due for closure, GM did not disclose a list of the dealers it plans to eliminate.

Dealerships themselves will have to make the announcement, and a full roster of soon-to-close stores probably won't take shape until next week.

Keeping a tight wrap on the bad news, GM released store closing data on a need-to-know basis. Chevrolet dealers, for example, knew the disposition of other local Chevy dealers but not of Buick, GMC or Cadillac dealers.

Local franchisees said GM offered financial incentives for dealerships that volunteer to close immediately instead of waiting until September 2010. The incentives included buying back inventory, auto parts and equipment. If the automaker declares bankruptcy as expected next month, the deal will be off the table.

The cuts are part of a larger GM plan to drop 2,600 of its about 6,000 dealerships as the automaker tries to regain profitability. Aside from the 1,100 dealership cuts, the company plans to sell its 470 Saturn, Hummer and Saab dealerships.

Friday's cuts will not be the last. GM said it expects to lose more dealers through attrition. Ultimately, about 90 percent of the remaining dealerships will stay with GM, the company said.

FedEx letters bearing the bad news began arriving Friday morning at GM dealers around the country. The letters state that dealers were judged on sales, customer service scores, location, condition of facilities and other criteria.

The letter left open the possibility that the decision could be reversed.

Both Chrysler and GM insist outlets are too close to one another, and that competition drives down prices. But as the dealer ranks thin and competition wanes, prices could rise.

As GM and Chrysler lost market share to Japanese and Korean brands, the automakers, as well as Ford Motor Co., ended up with too many dealerships. Many barely get by and can't afford to upgrade or hire the best personnel to compete with the Japanese, who have far fewer dealerships.

With fewer dealers, consumers won't see as much competition, said Aaron Bragman, an automotive industry analyst with the consulting firm IHS Global Insight.

"No longer will people be able to shop between three or four dealers within 15 minutes of each other for the best cutthroat price," he said.

GM held nearly 51 percent of the auto market in 1962, but only 22 percent last year.

Bragman said GM likely will go into bankruptcy protection June 1, but it's starting to negotiate deals ahead of the filing to speed up the Chapter 11 process.

"GM has been … acting as if they are negotiating a prepackaged bankruptcy," he said.

Information from Times wires was used in this report. James Thorner can be reached at (813) 226-3313 or jthorner@sptimes.com.

Tampa Bay GM dealers might avoid the automaker's ax 05/15/09 [Last modified: Monday, May 18, 2009 11:45am]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Federal agencies demand records from SeaWorld theme park

    Tourism

    ORLANDO — Two federal agencies are reportedly demanding financial records from SeaWorld.

    Killer whales Ikaika and Corky participate in behaviors commonly done in the wild during SeaWorld's Killer Whale educational presentation in this photo from Jan. 9. SeaWorld has been subpoenaed by two federal agencies for comments that executives and the company made in August 2014 about the impact from the "Blackfish" documentary. 
[Nelvin C. Cepeda/San Diego Union-Tribune/TNS]
  2. Legalized medical marijuana signed into law by Rick Scott

    State Roundup

    TALLAHASSEE — Gov. Rick Scott on Friday signed into law a broader medical marijuana system for the state, following through on a promise he made earlier this month.

    Gov. Rick Scott signed legislation on Friday that legalizes medical marijuana in Florida.
  3. Line of moms welcome Once Upon A Child to Carrollwood

    Business

    CARROLLWOOD — Strollers of all shapes and sizes are lined up in front of the store, and inside, there are racks of children's clothing in every color of the rainbow.

    At Once Upon A Child, you often as many baby strollers outside as you find baby furniture and accessories. It recently opened this location in Carrollwood. Photo by Danielle Hauser
  4. Pastries N Chaat brings North India cuisine to North Tampa

    Business

    TAMPA — Pastries N Chaat, a new restaurant offering Indian street food, opened this week near the University of South Florida.

    The menu at Pastries N Chaat includes a large variety of Biriyani, an entree owners say is beloved by millions. Photo courtesy of Pastries N Chaat.
  5. 'Garbage juice' seen as threat to drinking water in Florida Panhandle county

    Water

    To Waste Management, the nation's largest handler of garbage, the liquid that winds up at the bottom of a landfill is called "leachate," and it can safely be disposed of in a well that's 4,200 feet deep.

    Three samples that were displayed by Jackson County NAACP President Ronstance Pittman at a public meeting on Waste Management's deep well injection proposal. The sample on the left is full of leachate from the Jackson County landfill, the stuff that would be injected into the well. The sample on the right shows leachate after it's been treated at a wastewater treatment plant. The one in the middle is tap water.