Many Maine GM dealers relieved

Posted May 15, 2009, at 10:02 p.m.

Nobody popped champagne corks, but many General Motors auto dealerships in northern Maine expressed relief Friday that they hadn’t received letters notifying them they were among 1,100 of the auto giant’s U.S. dealers facing franchise terminations.

As far as anyone could tell, three or four of the 47 GM-licensed new car dealerships in the state received notifications on Friday by FedEx. Dealers in Calais, Dover-Foxcroft, Ellsworth, Machias, Presque Isle, Skowhegan and Waterville said they had not. Two GM dealers in the Bangor area wouldn’t comment.

“We’re still here,” said one employee at Morrison Chevrolet of Ellsworth.

“We did not get one,” said a worker at Carroll’s Auto Sales of Presque Isle.

Thomas T. Brown, president of the Maine Auto Dealers Association in Augusta, said he didn’t know how many dealers had received notices, which were due Friday. Bruce Gerrity, the association’s attorney, said he knew of three or four who received the vaguely worded letter, but he wouldn’t identify them.

“At this point, I think they don’t know how to take it,” Gerrity said. “I know some notices went out and I have been told the wording of the notice is confusing.”

Unlike Chrysler, which Thursday released a list of the 1,900 dealerships it is eliminating, GM declined to reveal which of its dealers will be affected.

Four Chrysler dealerships in Maine — located in Rockland, Brunswick, Sanford and Livermore Falls — have been targeted.

“We can say that the dealers were evaluated on a state-by-state basis,” said Pete Ternes, director of communications for GM’s Sales Service and Marketing Division in Detroit. “We didn’t compare a dealer in Bangor to a dealer in L.A.”

Stores facing closure are among the state’s poorest performers and will have a right to appeal the decision. GM eventually plans to drop 2,600 of its 6,200 dealerships as the company restructures.

The exact impact upon the state is difficult to discern but might be considerable. The three dealerships of Central Maine Motors Auto Group of Waterville, for example, employ about 100 people selling and servicing Chrysler, General Motors and Toyota products.

Central Maine Motors pays more than $100,000 annually to Waterville just in property taxes and many times more than that in sales taxes on the 1,800 new and used vehicles it sells per year, owner Charlie Gaunce said.

Brothers Chevrolet Buick Inc. of Dover-Foxcroft employs 10 workers and pays about $10,000 in property taxes to that town and $5,000 to $10,000 a month in state sales taxes, said Edward Kurzius, the company’s general manager.

Maine’s strong customer base might work to dealers’ advantage, said Ian Pratt, owner of Pratt Chevrolet Pontiac Buick of Calais. GM managers will make the heaviest cuts “in states they get crushed in,” he predicted.

It is far too soon to worry about dealership closings. Most dealerships carry several brand-name vehicles. Loss of the GM line would hurt but would not necessarily force dealership closures, Brown said.

“These letters talk about the potential that a dealership franchise will not be renewed in October 2010. They are not letters of termination,” Brown said.

He and Gerrity found GM’s shutdown rationale questionable.

“Dealerships actually pay the manufacturer, not the other way around,” Gerrity said. “What manufacturers have to sell are cars and parts. Dealers are not a cost to them. They make money for them. GM should be concerned about getting the cost side of their house in order, not the revenue side of it.”

The shadow of dealer shutdowns makes the dealers’ hard work more difficult, Kurzius said.

“We have had floor traffic, people looking for vehicles, but it’s on their mind. It’s all they want to talk about,” he said. “Is the company in business? Are we going to close? It’s hard to sell in that environment.

“GM should have gone bankrupt back in November. Then at least everyone would have known what was going on instead of putting everyone through this pain,” Kurzius added.

Having your livelihood hinging on a FedEx delivery is no fun, said Walter Hight, owner of Hight Chevrolet Buick Pontiac GMC of Skowhegan.

“Of course I am pleased we didn’t get one, but I feel sorry for the guy that’s getting it,” Hight said. “Everybody’s been waiting for the mail.”

nsambides@bangordailynews.net

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