Dealer or no dealer?

General Motors keeps all of its dealers in Mahoning and Trumbull counties.

By DON SHILLING

VINDICATOR BUSINESS EDITOR

General Motors’ long-standing roots in the Mahoning Valley appear to have spared the region from the massive dealership cuts announced Friday, an official said.

GM notified 1,100 dealers nationwide that they would not be renewed after October 2010, but the only local store on the list appears to be Reichenbach Motor Sales in North Georgetown in Columbiana County.

The survival of nearly 20 other dealerships in the region surprised Steve Chos, executive president of the Automobile Dealers Association of Eastern Ohio.

He figured the local cuts would be deeper, especially since at least five dealerships received closing notices in nearby Summit and Stark counties.

GM’s long-running manufacturing presence here must have saved the Valley from severe cuts, he said. He noted that the area has a dedication to GM brands because of the large number of people who have worked at the GM Lordstown complex and local Delphi Packard Electric plants, which used to be part of GM.

Dealers who are being eliminated received notices that were delivered by FedEx on Friday.

Ed Reichenbach, a third-generation Chevy dealer, was incensed by the method of delivery but optimistic about his future.

“They didn’t have the dignity to come out and hand me the notice in person. They sent it in the mail after we’ve been selling their products for 80 years,” he said.

He said he will remain in business selling used cars and providing service. All of his five employees will remain on the job.

Mark LaNeve, GM vice president of sales, service and marketing, told reporters on a conference call that the automaker was looking to close dealers that were performing subpar on sales, profits and customer satisfaction and didn’t have adequate facilities.

“They are in danger of going out of business anyway,” he said.

Dealers have protested the mass closings, saying that dealerships are independently owned and don’t cost GM money. LaNeve said, however, that paring down dealerships will provide more revenue for remaining operators so that they have more money to invest in their facilities and keep up with the competition.

Dealers were on edge Friday morning as they waited for notification. Many said they received phone calls from a GM official who told them not to worry — they weren’t on the closing list.

“We got a call that said if we saw the FedEx truck not to have a heart attack,” said Don Stratton, owner of Stratton Chevrolet in Beloit. “I was glad they called because the FedEx truck pulled up five minutes later.”

Greg Greenwood, owner of Chevrolet stores in Austintown and Hubbard, said his phone call was a “great relief.”

He immediately passed along the news to workers on the sales floor and in the shop.

“Everyone had a nice celebration,” he said.

Chos noted, however, that it may be too early to celebrate.

“It’s not that things change day by day. Anymore, it’s changing minute by minute,” he said.

GM is not finished cutting dealerships, and it’s likely to file for bankruptcy June 1. If it does, it hopes to quickly spin off its core brands into a new company.

GM has said it wants to cut its dealerships from 6,000 to 3,600 by the end of 2010, although LaNeve said the number left standing could be as high as 4,000.

On top of the 1,100 notifications Friday, GM also is eliminating nearly 500 Hummer, Saturn and Saab dealerships. It is in negotiations with other parties interested in assuming that distribution network.

Many of the remaining cuts will come as dealers go out of business on their own and others opt out of capital investments the automaker will require, LaNeve said.

GM previously has said it is eliminating the Pontiac brand, which will impact Jim Pace Pontiac of Niles. Joe Constantino, assistant sales manager, said the Pace dealership didn’t receive a letter Friday and isn’t commenting until it knows more.

Chrysler announced nearly 800 dealer cuts Thursday, including two local stores. Officials at Frederick Chrysler Jeep Dodge in Boardman, one of those on the list, could not be reached.

The other — Preston Chrysler Jeep BMW in Warren — will remain open as a BMW dealership, said Kevin Leya, co-owner.

About 85 percent of the dealership’s sales come from that brand, so the business will retain all 22 of its employees, he said. It is the only BMW dealership in the area.

shilling@vindy.com

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