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Auto industry's struggles hit home

Posted December 12, 2008

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— With Congress gridlocked and the White House pledging to prevent a "precipitous collapse" of the U.S. auto industry, local dealerships say they are concerned but hopeful.

The defeat of a $14 billion bailout plan in the Senate Thursday night left the Bush administration looking at ways to rush loans worth billions of taxpayer dollars to Chrysler and General Motors.

Democrats and the Bush administration argue that if one or more of the automakers go bankrupt, it would scare away buyers and send auto sales plummeting to new lows.

Economists say if one were to declare bankruptcy, as many as 3 million American jobs could be lost next year.

Local dealers say the struggles of the Big Three automakers is unheard of. They're waiting to see how the government's response will affect local business.

North Carolina's 675 auto dealerships represent about 18 percent of the state's retail sales. About 35 dealerships have closed in the past two years, according to the North Carolina Automobile Dealer's Association.

But the organization's president, Bob Glaser, said "potential bankruptcy of an automobile manufacturer is not an option."

Glaser said 80 percent of Americans have responded in polls that they would not want to buy a vehicle from a bankrupted car company.

Ray Howard, sales manager at Sir Walter Chevrolet in Raleigh, said Friday business is down 12.8 percent from this time last year, compared with other Chevrolet and GM dealers across the state that have seen anywhere from a 35 to 60 percent drop in business.

"In this type of economy, we feel, that's growth he said.

Howard said he is confident something will happen with the Big Three and that even if any of file for bankruptcy, he says it is not the end of the road.

"If the people know that they're going to go into Chapter 11 and come out functional, I think the public will be OK with it," he said.

Howard says that customers are still looking for deals and that while business is slow, customers are still shopping and still buying.

"Out in the real world, cars are still being wrecked. Cars are still quitting for whatever reason. And people have to have transportation," he said.

Eric Kaplan, sales manager at Crossroads Ford in Cary, shares the optimism.

"Let's get everybody back normal. Let's get the money in there, and let's get it off the news.


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  • bs101fly Dec 12, 2008

    does this mean we can look forward to a LOT fewer commercials by these no acting, shouldn't be on tv doing my own commercials because my ego is TOO BIG car dealers?

    You know,
    like that loon with the white hair and the white dog!
    AND Crossroads Ford!
    AND the former traffic guy superstar wannabe from wral!!!

  • drnc Dec 12, 2008

    The reason Ford is not asking for a bailout is they closed numerous US factories over the past few years. They also mortgaged their factories to get operating cash. The current bailout will only help UAW workers. GM and Chrysler will need more untold billions by April 1, 2009. Factories must close and workers must go for GM to remain a viable company. Chrysler is finished regardless.

  • lauraleigh Dec 12, 2008

    I understand that this automaker's crisis is limited to Michigan, where the UAW reigns supreme; in other parts of the country, where the UAW does not have power, manufacturing is going well. I say let the UAW eat this one.

  • OSX Dec 12, 2008

    We get ripped off when we buy a car from these guys. Now we are getting ripped from tax dollars and ripped when you buy a car. Nice.

  • dws Dec 12, 2008

    the UAW does not deserve a bailout

  • geosol Dec 12, 2008

    Yup!! Remember who is trying to help out the American worker and who is willing to see the American economy go down the tubes. Yup, this should mark the end of the Republican party's support with the working class American.

  • powelljohn Dec 12, 2008

    After many years of swearing I'd never own a Japanese car I bought a 2005 Honda Accord on the advice of my mechanic. I rented at 2008 Chevrolet Malibu and the center console fell off before I got out of the rental car lot. The car had 500 miles on it. I rented a 2008 Ford Taurus and it rattled like a 10 year old car. I thought it would break down before I got back to the rental car lot. I was given an H3 by Avis and had to return it because you couldn't open the doors from the inside. I do not understand why we are bailing out manufacturers that build such poor quality. I would be happy to buy American if they built something of quality. Now Ford is advertising that their quality is as good as Honda or Toyota. Why wouldn't I just buy another Honda?

  • Worland Dec 12, 2008

    Saying the "Big 3" in Detroit are looking for a bail out is a little misleading. There's Ford and the other "Bankrupt 2" in Detroit. Without a gov't bailout, it's just going to be Ford in Detroit.

    I think the UAW's response to the senate for fair and equitable wages demonstrates how out of touch the union is. Sure, the UAW bought and paid for Obama in the White House, but they don't own the Republicans in the senate. The UAW is just going to put their members out of work.

    No big deal. When Ford built an assembly plant in Mexico, the government there limited wages to $9 an hour to avoid creating an artificial upper class. I think the UAW should match that maximum wage for their unskilled assembly line workers. No takers? Too bad. Next thing you know there will be 760,000 UAW members jumping the border to Mexico looking for their old jobs!

  • PaulRevere Dec 12, 2008

    The "struggles" of the Big 3 are clearly NOT "unheard of". Give me a break! Hello! Car makers have gone out of business before (DeLorean, Yugo, etc). This is just bad business decisions (ie, caving to unions). The chickens are coming are to roost, as Obama's pastor once said.

  • Deep Thought Dec 12, 2008

    Two things:
    1. If Bush can give money to the Detroit 3 after Congress has voted not to, why do we even have Congress?

    2. The UAW union president would rather be unemployed than take a pay reduction?

    What is going on?