Valley GM dealers dodge closings

By Don Shilling

Hummer will be purchased by a Chinese company, but its U.S presence will remain strong, officials say.

General Motors delivered big news to its Mahoning Valley dealers Tuesday — most are part of its long-term plans and one may sell a Chinese-owned brand.

Most local GM dealers received letters that said the automaker wants them to remain in its shrinking dealership network. Not all dealers could be reached, however, to determine what they were told by GM.

Steve Chos, executive vice president of the Automobile Dealers Association of Eastern Ohio, said no dealers had confirmed to him that they were being terminated, but he also had not talked to everyone.

“We’re in pretty good shape, largely because we are a GM community,” he said.

Changes are coming, however, for dealers of Hummer, Pontiac, Saturn and Saab. GM is selling or phasing out those brands.

GM announced Tuesday that it has selected a buyer for its Hummer brand, and the Associated Press reported that it is a Chinese company, Sichuan Tengzhong Heavy Industrial Machinery Co.

Greg Greenwood, who owns a Hummer dealership in Austintown, said he hoped a U.S.-based investor would take over the brand but added that he still welcomes the investment because it saves the line and protects jobs.

He noted that news reports said the Hummer H3 and H3T will continue to be built in Louisiana through at least 2010.

Greenwood said he thinks the brand has a future, despite its beginning as a seller of large, gas-guzzling vehicles. He said he expects future Hummer models to be smaller and more fuel efficient, noting that an H4 already has been designed along those lines.

Greenwood also has Chevrolet dealerships in Austintown and Hubbard that GM is retaining.

Other dealers were happy with the news they received from GM.

“Saying it’s a lot of relief is an understatement,” said Russ Banks, owner of R.D. Banks Chevrolet in Champion.

GM dealers have been on edge because the automaker is in the process of cutting its dealership ranks from about 5,900 to about 3,600. GM filed for bankruptcy Monday as it tries to reorganize by cutting costs and reducing debt.

Two weeks ago, GM notified 1,100 dealers that their franchises would not be renewed when they expired in October 2010. The only local dealer to be terminated at that time was Reichenbach Motor Sales in North Georgetown in Columbiana County.

Other dealers were told on the phone two weeks ago that they were safe but didn’t receive official notice until Tuesday.

“I actually have a document now. That part is really good,” said Ken Sims, co-owner of Sims Buick GMC in Warren.

The new wave of letters informed some additional dealers nationwide that they won’t be part of GM’s long-term plans, said Susan Garontakos, a GM spokeswoman. She said she could not provide a number of additional cuts.

One local dealer, Quinn Chevrolet Buick in Lisbon, did not receive a notice Tuesday.

All other Mahoning Valley dealerships that were reached by The Vindicator said they received good news from GM. However, some dealerships could not be reached.Garontakos said much of GM’s future dealership reductions will come from attrition. She noted that 400 dealers went out of business on their own last year, and 250 dealers closed in the first quarter of this year as car sales tumbled. That trend is expected to continue, he said.

She added that about 450 dealers will be phased out as GM trims its brands.

GM said Tuesday that it has 16 potential buyers for its Saturn brand. Negotiations are continuing.

Officials could not be reached at the Saturn stores in Boardman and Niles, which are owned by Jim Pace.

He also owns a Pontiac dealership in Niles. GM has said it will phase out the Pontiac brand.

Tom Brittain, owner of Brittain Chevrolet Pontiac in East Palestine, said he was informed that he has retained his Chevrolet line but that GM will be winding down Pontiac sales through October 2010. GM will continue to provide Pontiac sales support, including rebates, until then, he said.

“It’s going to be a friendly close-out,” he said.

Doug Sweeney, co-owner of two GM dealerships in Boardman, was in the same situation. The Sweeney Chevrolet dealership will continue, while the other dealership will wind down its Pontiac sales and continue to sell Buick and GMC.

“We’re looking forward to the future,” Sweeney said.

Despite GM’s bankruptcy filing Monday, the two Sweeney dealerships sold 28 new and used vehicles that day.

shilling@vindy.com

SEE ALSO:GM to sell Hummer to Chinese; thousands of U.S. jobs to be saved and Sales of Cobalts tumble in May.