Redlands dealership lands on GM's drop list
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12:45 PM PDT on Monday, May 18, 2009
At least two Inland dealerships are now confirmed to be on a list of 1,100 that General Motors plans to drop as franchisees by October 2010.
Owner Bill Hatfield confirmed today that his dealership, Hatfield Buick GMC in Redlands, received a letter from GM Friday that it is on the list.
"We're going to contest this," said Hatfield, third-generation owner of the dealership, which has been in business since 1913. "We're going to make our case to them that this is the wrong move."
"But we want to emphasize that things haven't changed, and it's business as usual," Hatfield said. "We're going to take care of our customers as we always have."
General Motors, facing a possible bankruptcy filing June 1, is telling 1,100 dealerships nationwide their franchises will not be renewed. The company hopes closing dealers will cut competition between GM outlets and keep prices up.
As previously reported, Don McCredie, owner of Tri Buick Pontiac GMC in Hemet since 1974, on Friday confirmed his dealership was one among hundreds that GM will cut ties with based on a letter he received from the automaker. He called it "unfortunate."
Hatfield said GM did not give specific reasons why his dealership was picked for franchise termination. The dealership, which employs 25, is located at 301 E. Redlands Blvd. "It's really rough," Hatfield said of breaking the news to employees and customers.
"Maybe GM looked at their dealer list and said this one's near the freeway and this one isn't, so it has to go. I really don't know," Hatfield said. "I think people like a place where things aren't done the way they are somewhere else. I think our customers like the fact that I'm here all day, and they can come in and talk to me if they want."
GM is not releasing a full list of dealers who were sent similar letters. The franchise cuts will affect 20 percent of its current dealer network.
Some Inland dealerships said they received word Friday that they were spared, while others took a lack of correspondence from GM to mean there will be no change in their franchise pacts.
According to the Associated Press, many dealers have vowed to fight, first through a 30-day company appeal process, then possibly in court.
GM's dealers are protected by state franchise laws, and the company concedes it would be easier to cut them if it were operating under federal bankruptcy protection. GM says it's trying to restructure outside of bankruptcy because of the stigma of Chapter 11.
Chrysler dealers have fewer options because the company has already filed for bankruptcy protection, and federal bankruptcy judges generally trump state law.
Last week Chrysler announced it will close 789 of 3,200 dealerships by June 9. That includes Dodge City Chrysler-Jeep in La Quinta.
At least 13 Inland dealerships have closed since March 2008, amid the auto industry's worst sales slump in decades.
Reach Lou Hirsh at 951-368-9559 or lhirsh@PE.com
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