Dealer Showrooms Darken as GM, Chrysler Bankruptcy Threat Cuts U.S. Jobs

[Purveyor]

By Doron Levin

April 21 (Bloomberg) -- Martin “Hoot” McInerney, an auto retailer in southeastern Michigan for about 40 years, sold his Cadillac dealership for $5 million last year rather than wait for General Motors Corp. to determine his fate.

“How many Cadillac dealers will GM decide it needs?” said McInerney, 80, who still owns seven other dealerships. “Someone says 600, maybe it’s only 150.”

Thousands of GM and Chrysler LLC dealers across the U.S. are preparing for the probability that as many as 5,000 of them will be forced to close because of an automaker’s bankruptcy. Dealers say they’re ordering fewer vehicles, cutting expenses, retiring debt and firing workers to preserve cash.

“We’re ahead of the curve and ready to absorb shocks if one of these manufacturers liquidates,” said Sid DeBoer, chief executive officer of Lithia Motors Inc., a publicly owned dealership chain that said it relies on Chrysler brands for 32 percent of its revenue.

Lithia, based in Medford, Oregon, has sold or shut 17 stores in the past year, using $100 million in 2008 from sales of stores and other property to help reduce debt 19 percent to $645 million, according to data compiled by Bloomberg. Lithia has cut its workforce to 4,500 from 6,000 a year ago.

Brands at Stake

GM, negotiating a restructuring with the U.S. Treasury Department after borrowing $13.4 billion, has said repeatedly it will sell or end the Saab, Hummer and Saturn brands. Pontiac and GMC are both under review, people familiar with the matter said. Chevrolet, Cadillac and Buick are GM’s other U.S. brands and are also sold in other markets.

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BLOOMBERG: http://www.bloomberg.com/apps/news?pid=20601109&sid=aSefFiFMRV2I&refer=home

[bluestateguy]

1. If GM and Chrysler want to get revenge on Dick Shelby they can do the following

Close all dealerships in Alabama. Every single last one of them. Lock stock and barrel. And leave most of the blue state dealerships open.