Late last month General Motors, the world’s largest automaker, announced plans to cut 30,000 jobs and close nine North American facilities in the wake+ of a third-quarter loss of $1.6 billion and decreasing sales and market share. The plan is expected to reduce costs $7 billion by the end of 2006.
The plan is a stark turnaround from last year, when GM sold nearly 9 million cars and trucks, the second highest total in the company’s 97-year history. It calls for a capacity reduction of 1 million units by the end of 2008.
But with GM’s third-quarter share of the domestic automobile market falling to 25 percent this year from 28.5 percent in 2004, and year-to-date sales 3 percent lower than in 2004, how much effect will it have on GM dealers in Rhode Island?
Jack Clagg, general manager of Hurd Buick, Pontiac GMC in Johnston, said he does not think the reduced production should have an impact on the larger GM dealers in the state. It is the smaller dealers that may feel a pinch, he said.
As a leading GM dealer in the state, Hurd gets between 70 and 100 GM cars each month. The larger GM dealers get the majority of the vehicles available, said Clagg, with the smaller dealers taking what is left. Eventually Clagg expects there to be fewer dealers in the state.
Current owners of GM cars may fare the best, he said. Because of continuing demand but a soon-to-be decreasing supply, Clagg predicts GM cars will retain a larger percentage of their original price.
Bruce Korwin, executive manager at Al Cerrone Cadillac, Pontiac, Buick, GMC in South Attleboro, said the dealer has a large inventory and can still get most GM cars delivered within three weeks. The dealership gets between 60 and 70 GM vehicles each month.
November sales at Cerrone are rebounding from lower sales in September and October, when the residual effect of summer-long incentives decreased the number of cars sold, he said.
Simon Chevrolet Buick in Woonsocket said dealers should not see any significant supply changes in the next few months. That might change in February, March and April, said Jack Paliotte, general sales manager of Simon, but he does not foresee a major effect until plant closures begin next year.
