GM's plans could bring gains to Butler County dealerships
Butler County probably won't suffer a big hit under General Motors' plan to start forcing 1,000 to 1,200 underperforming dealerships to close — the initial phase of a plan announced Monday to cut more than 2,600 dealers by 2010. The truth is, nobody can know what might happen here.
But whatever the local impact, it most certainly will trigger some anxiety — and possibly result in some inconvenience — for those who wish to continue having their vehicles serviced, or who must have warranty work performed, by a GM service department.
When treated well, most car buyers develop a long-term relationship with the dealership at which they bought their vehicle. The new challenge for survivng GM locations will be to work hard to build and maintain the trust of those "displaced" owners who in the coming months will be needing their service and expertise.
GM's decision to begin closing dealerships in response to its deep financial troubles and obligations under its federal bailout will be a welcome boost to some dealerships and their service departments while being the unwanted fate for others.
To Mikan Motor Co. on New Castle Road, GM's decision to trim Pontiac from its vehicle menu is a devastating blow for a dealership that has long been loyal to that brand.
Dealerships that already pride themselves on excellent customer service will have to beef up that commitment even more.
Despite GM's problems and Chrysler being on the verge of bankruptcy, there will eventually be a resurgence in the sale of American-made vehicles as the economy rebounds from its current doldrums. Dealerships, as well as manufacturers, of all makes must position themselves to be ready when that sales resurgence begins.
Yesterday's announcement that Chrysler will work through a restructuring that is being called a "surgical bankruptcy" adds even more uncertainty to the market.
But there is hope. The struggling automaker is planning a rapid restructuring followed by a managerial and manufacturing rebirth guided by the core executives at the Italian carmaker Fiat, notably CEO Sergio Marchionne, who have been credited with the remarkable 2004 turnaround of what was then one of Europe's most troubled car companies. Today, Fiat is strong.
Back in Detroit this week, GM told its dealers about the dealership scale-back plan in a private video conference Tuesday. 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.
In addition, about 500 dealerships reportedly would be consolidated into other dealerships.
On Monday, GM confirmed that it also would go ahead with the speculated elimination of Pontiac. However, the National Automobile Dealers Association says only 27 dealers sell just Pontiacs; most Pontiac dealers also sell Buick and GMC vehicles at the same location.
In addition to selling Pontiacs, Mikan also is a Volkswagen dealership, although its livelihood has been based on the Pontiac brand.
Susan Garontakos, a GM spokeswoman, confirmed that the company is making decisions on which dealers to keep, based on their sales performance, capitalization, potential profitability, size, image and customer satisfaction scores. After that, she said, GM would go market by market and determine which dealerships are not meeting the terms of their franchise agreements.
That process will remain a source of interest and concern for Butler County car owners, as well as customers elsewhere. With the growth that this county continues to experience, it is hoped that the negative fallout of GM's decision will affect this county only minimally.
Still, GM dealerships here will no doubt have the opportunity to build a positive relationship with many more people from the region who will be faced with the necessity of having their service and warranty work performed at a place with which they currently are unfamiliar.
This county's dealerships — GM and others — have a good reputation regarding the quality and convenience of the sales experiences and service that they provide. Owners and employees of the county's dealerships have potentially a lot to gain in response to GM's Monday and Tuesday announcements.
Only they can determine whether they take full advantage of the upcoming possibilities.