GM’s troubles put a cloud over car shopping

HAMILTON, Ohio (AP) — In vehicle showrooms across the country, questions about the future of auto giant General Motors Corp. add to the usual haggling and give-and-take.

Car shoppers have been kicking the tires a little more cautiously as salespeople try to ease their worries about service warranties, resale values and even whether GM dealerships will still be around in another year.

The general manager of Rose Chevrolet in this southwest Ohio city gathered his sales force this weekend ahead of announcements expected today that will shape the outlook for a company long intertwined with much of America’s daily life.

“Here’s what we need to stress, guys,” Ed Larkin said at the dealership along a busy highway. “Rose Chevrolet is going to be here; we’re going to be here selling vehicles and here to service their vehicles. That isn’t going to change.”

But GM’s troubles — the company is considered likely to file today for bankruptcy court protection — are a concern for those who own or are considering buying one of the company’s vehicles in a recession that’s eroded the financial security of many households.

“This is a major purchase by consumers; they don’t make it very often, and they want more stability,” said Michael Robinet, vice president of global forecast services for CSM Worldwide, an auto industry consulting company based in Northville, Mich. “Consumer loyalty has been shaken by a lot of factors.”

Leo Chavez, a Chicago-area realtor, said he’s feeling GM’s pain himself. He’s been trying to get out of his Pontiac Grand Prix, a discontinued GM line, but said its trade-in value has fallen, and dealers use that against him in bargaining.

“I’m very disappointed with GM; I really am,” Chavez, 30, said Saturday at Chicago’s Grossinger City Autoplex, where he wanted to trade for a used Toyota Camry. “I have more faith [in] Toyota.”

Just outside the nation’s capital, jazz played in the showroom of an Alexandria, Va., dealership Saturday as veteran car salesman Earl Jones, 50, talked about a year that has been “like being on a roller coaster.”

Foot traffic and sales have slowed at the dealership, he said, and customers have become bolder in demanding bargains on GM cars.

“People come in and they ask us for the most ridiculous deals,” Jones said but added he’s going to stay positive as he keeps selling cars.

Some GM dealers still fly giant U.S. flags and urge people to “buy American,” but foreign automakers have also become part of the landscape with U.S. plants and community involvement.

“I think that’s mostly in the past now,” Dennis Sullivan, a Miami University economics professor, said of buy-American appeals. “I tell my students that they can buy American cars made by Honda in Marysville, Ohio, and by Toyota in Georgetown, Ky.”

Sullivan, who owns a Pontiac Vibe from an Oxford dealership that’s gone out of business, noted that even in the Reds’ Great American Ball Park in Cincinnati, birthplace of the first professional franchise in the sport known as “the national pastime,” the vehicle on display beyond the centerfield fence is a Toyota Tundra.

At Rose Chevrolet, Larkin is making plans to mark the dealership’s 25th anniversary in June. There’ll be a luncheon and recognition for longtime employees and a celebration with customers. He’s hoping to be able to offer big incentives to buy new Chevrolets; he expects the restructuring to improve long-term opportunity for the dealership.

Jim Meador, of nearby Darrtown, is also staying optimistic about the company whose cars, trucks and vans he’s been buying for three decades.

“It is a part of America and has been for a long time,” he said. “And hopefully, it will be for a long, long time to come.”