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of Shelbyville and several other General Motors dealerships in
chopping block after receiving notice Friday that their dealership agreements
would not be renewed when they expire late next year.
But most dealers are keeping quiet about the notifications as they hold out
hope they can persuade GM that they deserve to stay open.
Nationally, about 1,100 GM
dealers have received notice. But unlike Chrysler LLC, which released a list
Thursday of almost 800 dealers it plans to terminate, GM is keeping its list
secret.
Joe Munson, vice president
of Hubler Chevrolet told The Shelbyville News that he was surprised to receive
the closing letter, particularly because of the strong sales his dealership has
logged since opening in Shelbyville in 1988.
Shelbyville’s Hubler
Chevrolet was the only one of five GM dealerships owned by Hubler Automotive
that received the letter. Hubler also owns GM dealerships in
and Rushville.
Five other area dealerships
told WISH-TV Channel 8 that they have not received closure notifications:
Pedigo Chevrolet in
Son Buick-Pontiac-GMC in
W. Hare & Son Chevrolet in Noblesville, and Kutche Chevrolet-Pontiac-Buick
and Kutche Chrysler-Dodge-Jeep in Elwood.
Rex Collins, a Somerset CPAs
PC senior manager in charge of the firm’s automobile dealership practice, said
he is working with numerous dealers affiliated with GM and Chrysler. He
declined to reveal any GM dealers that had received closure notifications.
“The last 10 days, all I’ve
been doing is talking with Chrysler and GM dealerships,” said Collins.
GM dealerships on the chopping block can submit a viability plan by the end of
the month, in an attempt to remain open.
Hubler Chevrolet in
Shelbyville intends to do that, according to The Shelbyville News.
“We’ve been in business 21
years, and we plan to be in business for years to come,” Munson told the
newspaper.
Collins has advised his
clients to appeal.
“I think many dealers are
going to avail themselves to that,” he said. “One of the factors is going to be
financial viability.”
In the northeast part of the
state, three dealerships have confirmed that they received closure letters: Don
Ayres Pontiac-GMC-Honda in
Mendenhall-Roy Chevrolet in Grabill and Gene Reeg Motor Sales in
The 1,100 dealerships
nationally that have been notified so far are only part of the first round of
cuts planned by GM. The auto manufacturer plans to notify an additional 1,500.
They could include Saturn, Hummer and Saab dealerships, if those brands cannot
be sold.
Overall, GM aims to cut about 40 percent of its 6,000-dealer network by the end
of 2010 in hopes of returning the company to profitability.
Chrysler already is in
bankruptcy protection, and industry analysts say GM is making its cuts now in
preparation for a possible filing by June 1. The company has said it would
prefer to restructure out of court.
Collins agreed with GM’s
strategy to close dealerships, noting
sells as many cars with one-fifth the number of locations.
In small towns in
particular, GM believes customers will take their business to the company’s
next-closest dealership. But Collins said studies show otherwise.
“What is more accurate is
the Ford and Chrysler dealer will pick up the business,” he said.
Chrysler wants
to terminate the franchises of three of its
dealerships and 17 others in
according to court records. Axed locally would be Palmer Dodge Inc.,
Palmer Dodge West,
Plaza Road
Chrysler proposes eliminating 789, or about 25 percent, of its dealers
nationwide as part of the bankruptcy restructuring.
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