Cook’s Chevrolet brand safe for now
Car dealer likely to lose Jeep line but expects to keep Chevrolet
Steamboat Springs — Cook Chevrolet, Jeep and Subaru appears to be safe from the closure of 1,100 General Motors dealerships, owner Scott Cook said Friday.
Cook didn’t receive a letter containing bad news. He sells Chevrolets, a GM brand, at dealerships in Steamboat Springs and Craig.
“We did not get a letter, which means, the way I understand it, that we are not impacted,” Cook said. “So there’s no change.”
The Craig dealership carries Chrysler’s Jeep products, and Cook learned Thursday that he might not be able to sell that brand anymore. That information came as Chrysler cut nearly 800 dealerships across the country.
A bankruptcy court must verify the Chrysler decision, Cook said.
“The big thing with the Jeep thing is, of the franchises we have, that is by far our lowest volume franchise,” Cook said. “We hated to lose it, but we’ll survive.”
GM’s cuts are part of a larger plan to drop 2,600 – or nearly 42 percent – of its 6,200 dealerships, as the automaker tries to restructure outside of bankruptcy court, according to an Associated Press story.
Although GM doesn’t own the dealers, its network is too big, causing dealers to compete with each other, the AP reported.
The troubled companies aim to improve their business model with the cuts, Cook said.
“What GM and Chrysler are trying to do is, they are trying to eliminate the number of dealers down to the point where the average dealer sells more cars,” he said.
The problems haven’t struck Steamboat Motors, owner Jeff Steinke said. He sells Chrysler and Ford products. He received a letter from Chrysler on Thursday, but it didn’t contain bad news.
“It’s just been an interesting waiting period,” he said. “I was very optimistic but extremely concerned, as well.”
Steinke said he hopes for the best for Cook’s dealerships.
“I think having that extra GM product in our market offers customers all three domestic lines to shop,” Steinke said. “Competition’s always good. I’m big on that.”
Chrysler has filed for bankruptcy protection, but GM has not. The latter company didn’t release a list of dealers with whom it will stop doing business, saying it would allow the dealers to share the news, the AP reported.
Friday’s cuts will not be the last, the AP reported. GM said it expects to lose more dealers through attrition. Ultimately, about 90 percent of the remaining dealerships will stay with GM, the company said.
Steinke said he has expressed interest in carrying a franchise for foreign brands such as Toyota. He’s been unable to get one, though he has mechanics who are certified to repair Toyota and GM vehicles. Steinke praised the foreign producers’ business model.
“One of the things the imports have always done a better job of than the domestics is, they build to the demand and thereby they keep : their expenses in line,” he said.
Steinke has been trying to run his business intelligently.
“At this point, we’ve gotten our expense structure well down from where it was in the past, and our inventories are in line with our demand,” he said. “We’re about as tight as we can go.”
Cook said he’s waiting for people to loosen the purse strings.
“Hopefully, the economy gets a little bit better and people get a little more confident in what’s going on, and they start spending more money on shirts and shoes and cars and skiing vacations,” Cook said.
People with the money, credit and desire to buy a new car should do so now, Steinke said. As the manufacturers reorganize, fewer dealers and fewer cars will be available, but demand won’t change, he said.
“I think there’s going to be a transition there,” Steinke said. “These $5,000 and huge rebates – there are still going to be rebates, but they’re going to be much lower.”
Steinke was optimistic that the upheaval would strengthen the car industry.
“I think our years of being fat, dumb and happy as manufacturers are over,” he said.
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