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Thursday, Dec. 18, 2014

Auto bailout affects local dealers

Thursday, December 11, 2008

During their meeting with lawmakers, Detroit automakers asked lawmakers for $34 billion in federal loans, but what about the car dealerships who sell their products -- who will bail them out?

GM officials say they are in such dire straits that it would deeply cut jobs, factories, brands and executive pay as part of its plea to get $12 billion in federal loans with an additional $6 billion line of credit.

While, if approved, this money will help GM, who is going to help the thousands they plan to leave unemployed and out of business?

Brandon Hill, owner of Hills Auto Sales in Salem, said he has definitely seen the effects of the economy in his business.

Hill, who sells preowned vehicles, won't be directly affected if GM, Ford or Chrysler shut down dealerships but he has seen the effects of the falling economy.

"It has been a really weird year," Hill said. He explained that earlier in the year when gas prices were up, trucks and SUVs fell in value. Hill said now that gas prices are decreasing, the market for smaller cars has fallen. "We don't know what to buy," Hill said.

Hill said more recently, obtaining financing has become more difficult for customers. "Banks won't hardly loan any money and nobody has any money to spend," Hill said.

Hill said the banks have tightened up, making it harder for him to sell. "December is always a slow time of year, but people are just not buying as expensive of rigs," Hill said.

As for new car dealerships, where will they turn? It has not been reported yet how GM will choose the dealerships they shut down but Vic Davidson of Mark Martin Chevrolet in Melbourne said it will be primarily SAAB and Saturn dealerships that are shut down.

Davidson said they have seen a small down-turn in sales but it's a typical rollercoaster. According to Davidson, the GM sales have been helped with the GM supplier pricing.

According to Davidson, it is harder for a down-turn like this to affect such a small area because people are loyal customers and tend to come back to the same place consistently.



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