Good news for Peach
Published 2:51 pm Wednesday, May 20, 2009
By By Kerry Whipple Bean
Peach Chevrolet received good news this week — the renewal of its franchise with Chrysler, for which it serves as a dealer.
And as of Friday afternoon, Peach had not received any notice from General Motors about its franchise agreement.
Both Chrysler and GM, which are in efforts to restructure or rebuild their business, are cutting dealerships. Chrysler sent letters to all of its dealerships Thursday to let them know their fate, while GM sent letters Friday only to dealerships with which it would not renew its contract.
Chrysler cut ties with nearly 800 dealerships Thursday. GM has plans to cut 2,600 by 2010; about 1,100 of those dealerships received letters Friday.
While car dealers across the country, like most industries, have seen a slowdown in business as the economy has slowed, Peach said things are improving.
Chrysler has filed for bankruptcy and is working on an alliance with Italian carmaker Fiat, which would initially hold 20 percent of the company and could hold a majority stake once Chrysler repays loans from the federal government.
Peach said the first round of General Motors dealer cuts were related to dealer performance, while the second would involve realignment of brands.
Peach Chevrolet carries GM’s Buick, Cadillac, Chevrolet, GMC and Pontiac brands, not the Hummer, Saab and Saturn lines that are expected to be sold by GM. The second round of cuts will likely involve the Hummer and Saturn dealerships and another set of dealerships that will close voluntarily.
The National Automobile Dealers Association has estimated that dealership closings — including those already announced by GM and Chrysler — represent 187,000 jobs.
That number is more than the number of Americans who work for the two car manufacturing companies.
Dealership closings are also a problem for local governments, which receive sales tax revenue from car sales.