Auto industry's struggles hit home
Posted December 12, 2008
Cary, N.C. — 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.