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Home News-Telegram News No word yet on local GM dealership

No word yet on local GM dealership

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The owner of the GM dealership in Sulphur Springs was still waiting word Friday on whether or not his franchise has been targeted for shutdown by the parent corporation.

“I sure wouldn’t want to comment one way or the other and then turn around and get one,” Joe Mack Gober said mid-afternoon Friday of the anticipated letters being sent out to all General Motors dealerships. GM is dropping 20 percent of its dealers — roughly 1,100 — saying its financial troubles are due in part to an oversized network that created stiff internal competition and gave shoppers too much leverage to talk down sticker prices.

Gober said he had talked to some other dealerships about receiving the letters, which were being delivered by FedEx and UPS, which make deliveries throughout the day.

“Some of them have got them and some of them haven’t,” Gober said. “They’re getting them, though, right and left.”

Gober could not be reached later in the day Friday for more information. Calls to both the dealership, the city’s oldest, went unanswered Saturday morning, as did calls to Gober’s home.

GM and Chrysler are in the process of cutting a combined 1,900 dealerships across the United States. Lone Star Dodge, the Sulphur Springs Chrysler dealership, was informed Thursday it would not be affected by the cuts.

GM isn't publicly disclosing the list of dealerships that will be closed. Chrysler’s list was public information due to bankruptcy proceedings, but GM has not filed for Chapter 11 protection.

Several hundred of the roughly 1,100 GM dealers already knew they were headed for closure, but most of them learned for the first time Friday. The dealerships will be eliminated when their contracts end late next year.

Dealerships that disagree with GM’s decision can appeal, but have only until the end of the month to file a protest.

Dealers had been judged on sales, customer service scores, location, condition of facilities and other criteria.

While the targeted dealers represent about 20 percent of GM’s total, they make only 7 percent of its sales, the company said.

GM has outlined a plan to cut about 40 percent of its 6,000-dealer network by the end of 2010 in hopes of getting the company back on its feet. Besides the 1,110 dealership cuts, the company will shed about 500 dealerships that market the Saturn, Hummer and Saab brands, which GM plans to phase out or sell.

The cuts will allow the surviving dealers to expand the size of their markets, so they have a better chance of staying healthy and attracting private investment, said Mark LaNeve, GM’s North American vice president of sales and marketing.

‘‘Over time, they just can’t afford to invest in their business to the degree the competition has,’’ LaNeve said.

Toyota, for example, generally has larger and newer showrooms and service departments than GM and Chrysler dealers — making those dealerships more attractive to potential buyers.

The Obama administration’s auto task force, which is overseeing the GM and Chrysler restructuring because both have received billions of dollars from the government, was aware GM would cut dealers, LaNeve said. But he stressed the company made the decision on how many and where.

Chrysler is aiming to close its nearly 800 dealers by June 9, and those outlets may try deep discounts to clear out their remaining inventory. But in the long run, prices for cars and trucks will probably rise for customers as dealerships disappear.

 

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