Under pressure from the Obama administration to devise a restructuring plan by June 1, GM announced last month it would cut its franchise network from 6,200 to 3,600 dealers and sell or discontinue certain brands.
GM is hoping to find buyers for the Saturn, Hummer and Saab brands and is expected to discontinue the Pontiac nameplate.
At Don Hill Pontiac, Rick Hill knows that GM is planning to phase out the Pontiac brand. But he’s not ready to call it quits just yet.
“This company is too good a company to just let somebody like GM or somebody in the government make a decision that doesn’t know our company or our people or our customers,” Hill said. “I’m going to do anything I can to keep this company together. I feel obligated to do that.”
Hill’s family has operated the Kingsport Pontiac franchise since November 1971, when Don Hill — Rick’s father — acquired it from Red Barnes. Don Hill also owns the Jeep franchise in town — Jeep is a Chrysler brand. And Rick Hill operates Rick Hill Imports in Kingsport.
The Pontiac dealership employs 31 people. On Monday, Rick Hill said none of those employees had been laid off. He said he’s “pursuing opportunities” for the company.
“These are great people,” Rick Hill said. “We’ve got employees who have been with us for years and years. I feel responsible for these folks. And I have an obligation to do everything I can right to the last minute. That’s what we’re going to do.”
At Chaparral Pontiac Buick GMC in Johnson City, Freddy Gonzalez said the auto industry is losing a lot of heritage and sentimental value with the end of the Pontiac brand. But he said he’s looking on the bright side of the equation.
“There will be some tremendous I think positives out of it — other vehicles that will take the place of some of the Pontiacs. That’s what I’m looking forward to,” Gonzalez said.
But the reasoning behind the closure of some dealerships has him puzzled. Gonzalez said that plan “is an absolute outrage.”
“A dealership does nothing whatsoever to increase the expense for a manufacturer. As a matter of fact, it’s going to cost them in sales, cost them in other revenues they get from us — the things that we buy and pay them for. It doesn’t make any sense whatsoever,” Gonzalez said.
The National Automobile Dealers Association couldn’t agree more. The organization is urging its 19,000 members to contact their congressmen to voice opposition to dealership cuts. In an advertisement, the NADA says the cuts will result in more job losses, less competition and less convenience for consumers, and reduced sales tax revenue for local and state governments.
“Cutting dealers at this time would do absolutely nothing to make either GM or Chrysler more viable. The idea that dealer numbers should be rapidly and drastically reduced apparently comes from Wall Street advisers,” a NADA newspaper ad states. “Mr. President, we urge you to choose Main Street over Wall Street.”
At Champion Chevrolet Cadillac of Johnson City, General Manager Tim Copenhaver said GM dealerships employ an average of 30 people. Closing dealerships means those folks will be added to the nation’s unemployment rolls.
“It’s going to affect a lot of communities — a lot of lives. It’s going to have a huge effect on a lot of communities in lots of places,” Copenhaver said.
At Dotson Chevrolet in Big Stone Gap, General Manager Lee Stallard said he doesn’t understand how GM can save money by cutting its dealership network.
“If you slow down sales, how would that help you?” Stallard asked. “I’m thinking of ways to increase my sales.”
Whatever happens, Stallard said he believes his dealership, which has been in business since 1974, will remain a viable operation in Southwest Virginia, where several other GM franchises have closed in recent years.
“We are very effective as a dealer and very profitable and capitalized. I can’t imagine why they would want to send us on our way,” Stallard said.