Despite bankruptcy, GM strong in area
For local dealerships, it is very nearly business as usual
On the day General Motors declared bankruptcy, the sales staff at Keller Chevrolet in Cheektowaga did what they always do: sell cars. At noon, General Manager Dean Jackson and several salesmen took a break and gathered around the waiting room television of the 56-year-old dealership to watch President Obama discuss the future of the General Motors cars that they sell.
“I don’t think we heard anything we didn’t already know,” Jackson said. “But we don’t know the outcome of the bankruptcy.”
Keller and other area dealerships are waiting to see if they will be among the 40 percent GM plans to shutter under the bankruptcy. While the initial round of closings spared all but two Southern Tier dealerships in Western New York, more are expected to close as the bankruptcy rulings continue.
Paul Stasiak, president of the Niagara Frontier Automobile Dealer’s Association, said that all area General Motors dealerships are turning a profit. But GM is interested in merging and closing dealerships due to shifting and shrinking demographics in the area.
Consumers will not feel any effect as long as the company emerges out of bankruptcy in 90 days, he said. But it is “too early to tell” if the bankruptcy will affect the resale value of GM cars, he said.
The U. S. government has pledged to back warranties of new GM cars.
“The consumer has absolutely no fear of warranty coverage,” Stasiak said. “The consumer will see nothing. It will be very transparent to them.”
Local reaction to GM's bankruptcy
One of those consumers unfazed by the bankruptcy ruling is Mark Kerl of Alden. Kerl’s only concern before he bought a 2009 Chevy Traverse sport utility vehicle Monday was whether he would have more buying power now or later.
The 42-year-old Alden resident worked at the Buffalo American Axle Plant until it closed in 2007. His experience with supplying parts to GM has kept his faith in the brand, he said.
“When I lost my job, I could have had a sour taste in my mouth,” he said. “But I decided it’s a lot bigger issue than that. GM makes good vehicles.”
It’s that brand loyalty that continues to make Buffalo a strong market for GM. Jim Basil, president of Joe Basil Chevrolet, said that his dealership and Paddock Chevrolet in Kenmore were on target to become two of GM’s top three highest-selling U. S. dealerships in May.
Basil sold 23 cars from his Depew lot on Saturday alone, and he said that GM has 47 percent of the market share in Western New York.
“If the rest of the country had our market share, GM would be doing fantastic,” Basil said. “Our market has been very well protected.”
Basil said that he has stocked up on cars on his lot in case production idles so that his dealership would be safe for four or five months. At a Monday morning meeting, Basil told his sales employees to go “full force ahead.”
“This whole process is seamless to the customer,” he said. “Bankruptcy is not that big of a deal anymore.”
Bob Bell, a sales consultant at Basil for the last six years, said that many customers have been taking advantage of incentives that the company has been offering.
“GM did a very good job of preparing the public for this,” he said.
At Keller, Don Zich of Tonawanda prepared to buy a 2009 Chevrolet Silverado. The 34- year-old Dunlop employee said that his family has always bought GM, as his dad used to work there. He said that he is still confident with the brand.
“You always have the chance that down the road something major might happen,” he said. “I just don’t see it getting to that point.”
The bankruptcy comes only five days before Phil Garofaro will celebrate 50 years in the auto sales business. The semiretired consultant at Keller Chevrolet has been at the dealership for the last 22 years.
Garofaro keeps a running tally of repeat customers on a white board behind his desk.
“People say we don’t make a good car,” he said. “Believe me, we do.”
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