Business

GM appears to spare Fayette dealerships

Lexington-area General Motors dealers spent most of Friday waiting.

And waiting.

Nationwide, FedEx workers delivered notices to 1,110, or one in five, that GM intends to drop them late next year.

The announcement came a day after Chrysler told a quarter of its own dealers, including nine in Kentucky, that they would be dropped in a few weeks.

It appeared most GM dealers in and around Lexington were unaffected.

The following told the Herald-Leader after 4 p.m. that they had not received letters:

■ Glenn Auto Mall in Lexington.

■ Quantrell Cadillac and Saturn in Lexington.

■ Rod Hatfield Chevrolet in Lexington.

■ Courtesy Pontiac Acura in Lexington.

■ Adams Pontiac Buick GMC in Richmond.

■ Sutherland Chevrolet in Nicholasville.

■ Dan Cummins Chevrolet Buick Pontiac in Paris.

■ Bob Allen Motor Mall in Danville.

Two others — Jeff Jones Chevrolet Pontiac Buick in Versailles and Thoroughbred Chevrolet in Lexington — could not be reached after 4 p.m. Earlier in the day, both said they had not gotten letters.

Mike Wilson of Mike Wilson Chevrolet in Winchester declined to discuss the issue.

Unlike Chrysler, which published a list, GM declined to reveal which dealers will be eliminated. Nationwide, many dealers vowed to fight, first through a 30-day company appeal process, then possibly in court.

Jack Kain, the Kentucky director for the National Automobile Dealers Association, said he expects about 15 GM dealers around the state to be affected.

He said he expected most of those to be in rural areas with perhaps some in Louisville, "where they have so many."

The Courier-Journal reported Friday that Springhurst Chevrolet in Louisville and Alex Montgomery Chevrolet in Mount Washington received notices from GM.

"It certainly could happen in Lexington," Kain added. "I think everybody's kind of on the bubble."

GM has said its network is too big, causing dealers to compete with each other and giving shoppers too much leverage to talk down prices and hurt future sales. While the targeted dealers represent about 20 percent of GM's total, they make only 7 percent of its sales, the company said. And beside those 1,110 dealership cuts, the company will shed about 500 that market the Saturn, Hummer and Saab brands, which GM plans to phase out or sell.

Bill Bridges, president of Quantrell Cadillac and Saturn of Lexington, said he did not receive a letter but will be affected by what will likely be the sale of the Saturn and Saab brands.

Bridges said Friday that GM should have begun revoking franchises years ago because there are "way too many" dealers.

Interviewed earlier in the day, Jeff Jones of the Versailles dealership said he's always concerned about GM and what it does in its "ultimate wisdom, which hasn't been so smart."

"Dealing with GM is like playing Russian roulette with the gun in the hands of a crazy person pointed at you," he said.

GM lost its aggressive edge 20 years ago, in Jones' estimation.

"They have been playing follow-the-leader to Ford and Chrysler," he said.

Both GM and Chrysler are scrambling to reorganize and stay alive in a severe recession that has pummeled sales for U.S. automakers, which had already been losing market share to foreign companies for decades.

Chrysler is in bankruptcy protection, and industry analysts say GM is making its cuts now in preparation for a bankruptcy filing June 1. The company says it would prefer to restructure out of court.

The dealer cutbacks could wipe out 100,000 jobs, according to industry groups, though some dealerships will likely stay open selling other brands of new cars or selling used cars.

And Friday's cutbacks won't be the end. When the surviving dealers' contracts are up in late 2010, GM will cut still more by not offering renewals to about 10 percent of the dealers who are left.

  Comments