Scott Olson, The IBJ
solson@ibj.com
Hubler Chevrolet Center Inc. of Shelbyville and several other General Motors dealerships in Indiana are on the chopping block after receiving notice Friday that their dealership agreements would not be renewed when they expire late next year.
But most dealers are keeping quiet about the notifications as they hold out hope they can persuade GM that they deserve to stay open.
Nationally, about 1,100 GM dealers have received notice. But unlike Chrysler LLC, which released a list Thursday of almost 800 dealers it plans to terminate, GM is keeping its list secret.
Joe Munson, vice president of Hubler Chevrolet told The Shelbyville News that he was surprised to receive the closing letter, particularly because of the strong sales his dealership has logged since opening in Shelbyville in 1988.
Shelbyville's Hubler Chevrolet was the only one of five GM dealerships owned by Hubler Automotive that received the letter. Hubler also owns GM dealerships in Indianapolis, Franklin, Bedford and Rushville.
Five other area dealerships told WISH-TV Channel 8 that they have not received closure notifications: Pedigo Chevrolet in Indianapolis; W. Hare & Son Buick-Pontiac-GMC in Indianapolis, W. Hare & Son Chevrolet in Noblesville, and Kutche Chevrolet-Pontiac-Buick and Kutche Chrysler-Dodge-Jeep in Elwood.
Rex Collins, a Somerset CPAs PC senior manager in charge of the firm's automobile dealership practice, said he is working with numerous dealers affiliated with GM and Chrysler. He declined to reveal any GM dealers that had received closure notifications.
"The last 10 days, all I've been doing is talking with Chrysler and GM dealerships," said Collins.
GM dealerships on the chopping block can submit a viability plan by the end of the month, in an attempt to remain open.
Hubler Chevrolet in Shelbyville intends to do that, according to The Shelbyville News.
"We've been in business 21 years, and we plan to be in business for years to come," Munson told the newspaper.
Collins has advised his clients to appeal.
"I think many dealers are going to avail themselves to that," he said. "One of the factors is going to be financial viability."
In the northeast part of the state, three dealerships have confirmed that they received closure letters: Don Ayres Pontiac-GMC-Honda in Fort Wayne, Mendenhall-Roy Chevrolet in Grabill and Gene Reeg Motor Sales in Columbia City.
The 1,100 dealerships nationally that have been notified so far are only part of the first round of cuts planned by GM. The auto manufacturer plans to notify an additional 1,500. They could include Saturn, Hummer and Saab dealerships, if those brands cannot be sold.
Overall, GM aims to cut about 40 percent of its 6,000-dealer network by the end of 2010 in hopes of returning the company to profitability.
Chrysler already is in bankruptcy protection, and industry analysts say GM is making its cuts now in preparation for a possible filing by June 1. The company has said it would prefer to restructure out of court.
Collins agreed with GM's strategy to close dealerships, noting Toyota sells as many cars with one-fifth the number of locations.
In small towns in particular, GM believes customers will take their business to the company's next-closest dealership. But Collins said studies show otherwise.
"What is more accurate is the Ford and Chrysler dealer will pick up the business," he said.
Chrysler wants to terminate the franchises of three of its Indianapolis dealerships and 17 others in Indiana, according to court records. Axed locally would be Palmer Dodge Inc., 4545 E. 96th St.; Palmer Dodge West, 5051 W. Pike Plaza Road; and Gene Beltz Shadeland Dodge, 1630 N. Shadeland Ave.
Chrysler proposes eliminating 789, or about 25 percent, of its dealers nationwide as part of the bankruptcy restructuring.