Peninsula Daily News and news sources
Howie Ruddell, owner of Ruddell Auto Mall in Port Angeles — one of two General Motors dealers on the North Olympic Peninsula — said he expects his business to continue going strong as GM trims locations nationwide.
GM told its dealers in a video conference on Monday that it would thin 1,000 to 1,200 under-performing locations, according to a dealer who spoke to The Associated Press on condition of anonymity because the video conference was private.
Chris Koenig, speaking for the North Olympic Peninsula’s other GM dealership, Koenig Chevrolet-Subaru in Port Angeles, said he had no comment on the situation at this time.
Ruddell is confident about the performance of his dealership at 110 Golf Course Road.
“We are very comfortable in our past performance in terms of sales and market share and customer satisfaction and in the investments in our training and facilities,” Ruddell said this week.
The closures are part of the company’s plan to cut more than 2,600 dealers by 2010. GM plans to reduce dealerships by 42 percent from 2008 to 2010, cutting them from 6,246 to 3,605.
Scrap Pontiac
GM has decided to scrap its Pontiac brand and either sell or close Hummer, Saturn and Saab. It will focus on four core brands: Chevrolet, Cadillac, GMC and Buick.
“In the bigger picture, General Motors has significant work ahead of them in terms of dealer consolidations,” said Ruddell, who is the only Pontiac dealer on the Peninsula.
Ruddell Auto Mall also sells GM brands such as GMC, Buick and Cadillac — and the separate Hyundai line.
“The sale of Hummer, Saab and Saturn obviously play into this present plan to reduce from 6,200 to ultimately about 3,600 dealers, and this is something needed for some time,” Ruddell added.
“Ultimately better for the whole market, but relative to that, we are very time comfortable with our position with GM in this market place.
“Undoubtably there will be difficult days ahead for many other dealers though.”
Only 27 dealers nationwide sell only Pontiacs, according to the National Automobile Dealers Association.
Service remains
Ruddell said that current Pontiac owners shouldn’t worry about their warranties or parts for their vehicles.
“Pontiac owners will continue to have warranties handled by Buick and GMC dealers,” he said. “That won’t change, and there will be availability of parts.
“Our paramount concern is, people who own vehicles right now know that they will not be alienated. We are here to support them as far as servicing goes.
“We also like to say that, just because Pontiac goes away, the cars don’t necessarily go away.
“The name it is sold under might change, but the car isn’t going to go away if it has been a viable vehicle.”
The company expects to lose 500 Hummer and Saturn dealers when those brands close or are sold, and it expects 400 dealers to close voluntarily. Another 500 would be consolidated into other dealerships, company spokeswoman Susan Garontakos confirmed.
Decisions
She said GM is in the process of deciding which dealers to keep based on their sales performance, capitalization, potential profitability, size, image and customer satisfaction scores.
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.
John McEleney, chairman of the National Automobile Dealers Association, said in a written statement that GM must treat all of its dealers fairly and those that close should be compensated.
“It’s not out of any fault of their own that these dealers are being forced to close their businesses,” McEleney said.
GM is surviving on $15.4 billion in government loans and faces a June 1 government deadline to complete restructuring moves, win concessions from its unions and cut its debt. If it fails to meet the deadline, it will go into Chapter 11 bankruptcy protection.
GM on Monday announced a plan, which includes an offer to the federal government to swap roughly $27 billion in bond debt for GM stock, that would leave current shareholders holding just 1 percent of the century-old company, which is fighting for its life in the worst auto sales climate in 27 years.
A committee representing the bondholders said Thursday that they want a majority stake in the restructured automaker in exchange for forgiving their claim to GM debt.
