TERRE HAUTE — It’s not yet clear whether General Motors will be closing any of its dealerships in the Wabash Valley in the wake of a major restructuring plan announced Monday. The struggling carmaker said it plans to close 42 percent of its car dealers.
“Your guess is as good as mine,” said Keith Perry, manager of Mike Mooney Pontiac, Buick, GMC in Paris, Ill., when asked if Mooney’s will be affected by the decision.
Perry said he and others in the auto business have been hearing that GM likely would close dealerships in large metropolitan areas, which may be “over-dealered.” That would spare small city and rural dealerships, such as the one in Paris.
“That’s what I would anticipate here … [but] we just don’t know yet,” Perry said.
There currently are 6,246 General Motors dealerships. The carmaker plans to cut that number to 3,605 by 2010, according to the plan announced Monday in Detroit.
“I’m 99.9 percent sure that we’ll be fine,” said Joe Mascari, general manager of Sullivan Automotive Group, which is a Chevrolet, Buick, Pontiac and GMC dealership. Stand-alone Pontiac dealerships are more likely to be closed, he said.
In addition to shuttering nearly half of its dealerships, GM also announced Monday it will phase out production of its storied Pontiac line of cars by no later than next year.
The decision to drop the Pontiac line will have no negative effect on Pontiac owners, Perry said. He compared it to GM’s decision, announced in late 2000, to phase out the Oldsmobile brand.
“That all went very smoothly,” Perry said. Dealerships will still have parts and service available for Pontiacs. “There will be a process to take care of everybody.”
Already some vehicles formerly in the Pontiac line have been redesigned and given new labels inside the GM family, Perry noted. For 2009, the Pontiac Torrent, an SUV, has been given a new body design and designated the GMC Terrain, he said.
Sullivan Automotive Group’s Mascari also said Pontiac owners need not worry about availability of future parts and service. And he noted that the federal government is guaranteeing GM and Chrysler warranties. Even if GM declares bankruptcy, the dealerships will continue to sell and service cars, Mascari said.
The planned closing of dealerships and the halting of the Pontiac line are part of GM’s efforts to convince the federal government to continue to lend the company money to survive the ongoing slump in new car sales. Since December, the government has loaned GM $15.4 billion.
GM’s new car sales were down by more than 50 percent earlier this year compared with 2008, but times are tough for all car makers. So far in 2009, all new vehicle sales are 40 percent below where they were a year ago, according to the Christian Science Monitor.
“I think we are pretty much, hopefully, through it,” Perry said of the current sales slump. Floor traffic is up at the Paris dealership and more people are showing an interest in new cars, he said. “We’re optimistic about the future.”
Arthur Foulkes can be reached at (812) 231-4232 or arthur.foulkes@tribstar.com.
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