Business

GM dealers cut in Middlesboro, Inez

General Motors dealers in Middlesboro and Inez said Monday they were among those told by the automaker on Friday that their franchises will not be renewed late next year.

Nationwide, GM told more than 1,100 dealers that it plans to cut ties with 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 as it proceeds through bankruptcy.

"We got double-whammyed," said Dale Epperson, owner of Epps Motors in Middlesboro, which was cut by both Chrysler and GM.

"We're not just going to lay down," he said. "We've been in business 50 years, and we plan on surviving through this."

The GM franchise agreement won't expire until October 2010, leaving many more selling months for Epps and his 30 employees, and as he noted, "used cars are most of our business anyway."

The company also sells Nissans, which have not been affected by dealer cutbacks.

In far Eastern Kentucky, Mountain City Chevrolet in Inez also was told that GM doesn't plan to renew its franchise.

Jeremy Wellman, general manager, said the dealership can appeal, although no decision has yet been made.

"Who knows what's next? You just try to make the best of things and go on," Wellman said. "Salespeople are resilient people. We'll just keep doing what we do. It's business as usual for the next year and half."

Mountain City also has a Ford dealership "that is doing very well."

"It's not like we're packing up and going home," Wellman said. "That's clearly not the case."

The company as a whole has more than 30 employees.

Some others remained hush-hush about their futures. Rick Drake of the Drake dealership in Monticello was told Thursday that Chrysler was cutting his dealership, and he declined to say Monday whether he received a letter from GM. He also sells GM products Chevrolet and Pontiac.

"I'm just going to deal with the Chrysler problem right now," he said.

An employee at Piles Chevrolet Pontiac Buick in Williamstown said that dealership also wasn't commenting on whether it received a letter.

Over in Pineville, Steve Bailey, general manager of Lee Chevrolet Pontiac Chrysler Dodge, breathed a sigh of relief late Friday. The Lee company was told Thursday that Chrysler will cut its franchise early next month, but "we didn't get a GM letter. Thank God."

"Really, the Chrysler Dodge thing didn't affect us that much with the new cars," Bailey said. "We're more of a used-car dealership here in the mountains."

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

Montgomery's Mount Washington dealership also was cut by Chrysler. His two dealerships in Campbellsville and Burkesville were unaffected.

"We intend to stay open selling used cars" in Mount Washington, Montgomery said Monday.

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

A group representing Chrysler dealers said Monday it is in talks with the automaker in hopes of getting it to scale back its termination plans. Michael Bernstein, an attorney for the Chrysler National Dealer Council, said that it's unlikely that Chrysler will change its mind about eliminating dealer franchises, but he's optimistic that the company will at least agree to end fewer than the 789 originally listed in its court motion.

Both GM and Chrysler have said their dealer networks are too large, causing them to compete with each other and giving shoppers too much leverage to talk down prices and hurt future sales.

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.

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