Car dealers may have upper hand in consolidation plans

The Fort Worth Star-TelegramDecember 22, 2008 

To hear auto industry analysts tell it, one thing General Motors must do to survive is eliminate Conrad Holt's business and many others like it.

Holt owns Saturn of DFW, the three Tarrant County dealerships that sell GM's relatively small, unprofitable Saturn brand, which many analysts say should probably just go away.

Not Holt. He wants to see the Saturn brand and his business survive.

"I feel like Saturn is part of the solution, not part of the problem," Holt said. Even in a tough economy, with auto sales in the Metroplex off 40 percent in November, Holt says his three small locations — in Hurst, Fort Worth and Arlington — are viable businesses.

And as long as Holt, and dealers like him, want to stay in business, it's going to be hard for manufacturers to shut them down.

"The problem is, you can't just go in and close a dealership" because they are protected by state franchise laws, said George Magliano, director of auto industry research for IHS Global Insights.

The financial lifeline the U.S. government extended to GM and Chrysler on Friday gives the manufacturers three months to work out some enormously difficult restructuring plans.

And there is widespread agreement among analysts that GM, Ford and Chrysler need to drastically prune their dealer networks. GM has said it intends to cut its 6,450 dealers to about 4,700 by 2012.

That's easier said than done.

To read the complete column, visit The Fort Worth Star-Telegram .

McClatchy Washington Bureau is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service