GM dealership seems safe here

Friday, May 15, 2009

While an announcement on car dealership closings was expected Thursday, it only seemed logical that the General Motors dealership in Lewisburg would remain in business.

That's according to Eddie Roberts, vice president and financial advisor for the Roberts & Lyons on Ellington Parkway who quoted an e-mail from GM saying that dealership sold 58 vehicles in April.

Attempts to reach Richard Lyons, owner of the long-time Chevrolet Buick Pontiac GMC store, were unsuccessful.

By selling 58 vehicles last month, the dealer here was ranked top in sales in the GM district that includes Franklin, Nashville, Clarksville and a broad area of Middle Tennessee between Knoxville and West Tennessee, Roberts said.

"When GM starts to pair down dealerships," Roberts said, "they'll start with those in big cities."

Print and broadcast reports nationally are saying that auto manufacturers like GM have too many dealerships so that the American car company has its own dealerships competing with themselves.

Roberts said he believes decisions on which dealerships to discontinue will be based, largely, on sales performance, a factor that bodes well for the local economy in Lewisburg and Marshall County.

Given that insight, Mayor Bob Phillips was consulted. With nearly 12 years in office, Phillips compared and contrasted the impact of a couple of economic hits suffered locally.

"I worried a lot about what would happen to our sales tax revenue when ICP closed," the mayor said.

International Comfort Products, the successor of Heil Quaker's air conditioning and heating unit factory here, used to employ more than 2,000 people, so Phillips was worried "that people wouldn't be able to buy things.

"But," he continued, "the biggest blow was when the Toyota dealership moved to Columbia.

"Car sales are a base for our sales tax revenue," Phillips said. "Car sales are a part of our economy."

Nationally, it's not just GM. Chrysler was expected to make an announcement late this week, so as Jim Meenan reports in Indiana from the South Bend Tribune, "It's a very nervous time for automobile dealers."

Both GM and Chrysler were expected to announce the closing of thousands of dealerships and Mike Leep Sr., president of the Gurley Leep Automotive Family, said "We worry just like everybody else," the South Bend Tribune reported, quoting a Chrysler dealer.

But Matt Helmkamp, president of Gates Chevy World in Mishawaka, is less worried, the Indiana paper reported: "They have a rating system of dealerships, and we are in the top 25 percent of the dealers across the country," Helmkamp said, noting he believes that statistic will keep his dealership safe.

"I think every Hummer, Saab, Pontiac and Saturn dealer is either going to go away or be sold to an outside investor," Helmkamp was quoted as saying about GM's plan to shut down Pontiac and seek buyers for the other brands.

The Indiana report is consistent with what Roberts said here, but he focused on the contrast between big city markets and small town dealerships.

There's a "big difference" between the two, Roberts said, noting "fewer dealerships" in rural areas that are further apart.

In late February, Roberts and Lyons spoke of the transition in ownership from the Roberts family to Lyons. At that time, Lyons reported strong sales here.

"We sell to a lot of Titans and Predators," Lyons said. "The dealership has been built on networking...

"We ended up third in GM new car sales" in the region that reaches to Bowling Green, Chattanooga, the Alabama line and toward Jackson, Tenn., he said. "It brings a lot of money into the county."

His records indicate the business forwarded nearly $1,367,000 in sales taxes to the state last year. From that figure, the city and county get two parts: the local option sales tax and state-shared taxes.

Lyons said he sells many cars by talking to people on the phone and he has cars delivered to customers' homes.

Other GM dealerships nearby in Tennessee include Franklin GM which was seen as selling the fourth highest number of vehicles (43) in April, Roberts said. Wyatt Johnson in Clarksville sold 54. Beamon Chevrolet sold 30 in Nashville where Tom Bannon Chevrolet sold 55.

While Roberts didn't presume to speak for GM, his conclusion early this week was that if GM were to cut 42 percent of its dealerships, then mathematically that would mean 39 dealerships might not be continued across Middle Tennessee.

As reported in South Bend, the announcements could have staggering effects with dealers stuck with cars that have been on their lot several months.