Dealer to lose Cadillac franchise

Dealer to lose Cadillac franchise


P.I. owner says GM made right move

Kirk Carroll doesn’t like the idea of no longer selling Cadillacs, but he does appreciate how General Motors Corp. is handling the closure of about 1,100 dealerships nationwide.

The 47-year-old owner of Carroll’s Auto Sales of Presque Isle is among 200 dealers across the country who received a “wind down” letter from GM on Monday. Carroll’s letter informed him that his franchise agreement to sell Cadillacs would end late next year, he said.

Given that he will continue to sell Buicks, Chevrolets and GMC trucks at his 80-vehicle lot — and has sold only a handful of Cadillacs annually — Carroll called the proposed agreement “a soft landing.”

“They have really thought this through very well ahead of time in helping not to interrupt a dealer’s operations or a customer’s service and warranty needs,” Carroll said Thursday. “They are also giving us some money. Dealerships that are [losing some or all of their franchises] are getting anywhere from $20,000 to $1 million.

“They are parting [with dealers] in a very professional manner, I think,” he added. “I think it was a very good move for GM and it’s a very positive thing.”

Not that other dealers losing franchise deals would agree, Carroll said.

“If you are one of those guys losing his dealership, there’s nowhere near enough money to compensate for the loss,” he said.

More than 15 GM and Chrysler dealerships in Maine are targeted for closing due to the bankruptcy of the two U.S. automakers, according to U.S. Sen. Olympia J. Snowe, R-Maine.

Chrysler has identified 789 dealerships nationwide that it plans to close next Tuesday, about a quarter of the company’s dealership network. Dealers received only three weeks’ notice.

GM told 1,100 dealerships it does not plan to renew their franchise agreements in late 2010 and expects to shed an additional 900 dealerships through attrition and by selling or discontinuing its Hummer, Pontiac, Saab and Saturn brands.

Unlike Chrysler, which has released a list of the dealerships it plans to eliminate, GM declined to reveal which of its dealers will be affected.

Four Chrysler dealerships in Maine — located in Rockland, Brunswick, Sanford and Livermore Falls — have been targeted.

GM has 47 licensed new car dealerships in Maine. Its handling of the closings, and the unclear criteria by which it selected who closes, has led to widespread criticism, as has Chrysler’s abrupt June 9 closures.

“The American taxpayer has provided $70 billion to assist these companies — we deserve answers and the dealers deserve far better,” Snowe said Wednesday at a hearing of the Senate Commerce Committee, of which she is a member.

At the hearing, GM President Fritz Henderson and Chrysler President James Press said there are too many dealers, with many representing the same company often competing with each other for sales. Many dealerships date to the 1940s and 1950s, when motorists lived farther apart and Detroit automakers led the world in sales, they said.

After hemorrhaging customers for decades and losing market share to foreign competitors, the two automakers said their companies need to scale back their operations to become leaner and return to profitability.

Henderson told the committee that 500 dealers had appealed GM’s decision to sever ties. GM has reversed itself on 11 of them, he said.

John McEleney, chairman of the National Automobile Dealers Association, has expressed concern about GM’s plan to require all of its surviving dealers to sign what he called a one-sided, open-ended operating agreement as a condition for remaining a GM dealer.

“If I sign it, I will be committing my business to spend hundreds of thousands of dollars that I know about today, and committing to millions of dollars of potential financial obligations in the future,” McEleney said in a statement.

Carroll said he believes that the surviving dealerships would likely be substantially improved, probably with some help from GM, including their taking on greater vehicle inventories and, possibly, getting funds for building improvements, he said.

The Associated Press contributed to this report.

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Comments
14 comments on this item

Mr. Carroll is speaking for himself not all car dealers. Perhaps try interviewing some of the other people that work for these dealers the mechanics, secretarys ect... and see how they like loosing theyre jobs. See how fare they think it is.

"More than 15 GM and Chrysler dealerships in Maine are targeted for closing due to the bankruptcy of the two U.S. automakers, according to U.S. Sen. Olympia J. Snowe, R-Maine."

It didn't really hit me that the government owns GM until I read this comment. We can't get out of this mess fast enough.

This is the sentence that really got my attention:......“The American taxpayer has provided $70 billion to assist these companies — we deserve answers and the dealers deserve far better,” Snowe said Wednesday at a hearing of the Senate Commerce Committee, of which she is a member.

Is the Senator referring to stimulus bailout money? the stimulus bill that Snowe voted for and did not read?

It would also be very interesting to see how many of the dealerships slated for closure, did not contribute to or support the Obama campaign.

it took years to get into this mess...so i bet it will take years to get out of it as well

...so long as they continue to perform Warranty work on my Caddy.

Concerned1,

So you believe that Mr. Carrol should support these mechanics, and salesman even tho he isnt selling enough cars in this economic enviroment?

Shiretown.net - Aroostook Countys Discussion Place

The 20K will send Mr. Carroll on a nice trip. That's my and your money he's getting. GM is owned by the government aren't they? Bailout Bonanza Bucks!

Obamonomics at work.

just "KEEP THE CHANGE"

Working at a Dealership for 22 years I have to think ....how much do we as a store cost General Motors?NOTHING ..all our product is paid for before we get it ..we are a profit center for the franchise ..does the unemploment of the people help the economy?When is the public going to be aware of where this current administration bringing us ?

Cadillacs another dinasour

'G' overnment 'M' otors-

So you run a company into the ground: - no problem.

Welcome to the world of B Hussein O../ N. Pelosi / O. Snowe -- and the rest of the meddling 'feel good' left coast idiots

Wait til the Federal Gov't uses California as a precedent to take over states.

Thanks to all of you who voted for the idiot in the White House! Gee, I always wanted to own a car company- all the pain with none of the perks. Snowe is no better than the Democrats. I thought when we bailed these companies out when George W. Bush was in office it was supposed to prevent the need for any further money (Not). When Obama says he doesn't want to run a car company he's lying. It's all about having the power to dictate every single aspect of our lives- what we drive, what we eat, how warm we can keep our homes, how much electricity we can use, and on and on. If we don't take our country back soon, Cuba is going to look like Shangri-La!

Ladyslipper-- "The American taxpayer has provided $70 billion to assist these companies — we deserve answers and the dealers deserve far better,” <-- Not to mention the stock $ that was lost. Yay for us...

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