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Value in auto deal varies with dealer
(The Brunswick News Via Acquire Media NewsEdge) Jan. 2--Gary Hudgins is still trying to weather the storm.
The owner of the Carl Gregory Chrysler Dodge Hyundai dealership at 5400 Altama Ave., says the recently approved $17.4 billion bailout for the automotive industry won't help small-town dealerships like his.
"It really means zero down here on the level that we're on," Hudgins said. "It has no effect on us. It's strictly for the manufacturers. Until banks release credit standards, it's going to be tough."
The plan, which was announced Dec. 19 by President Bush, gives ailing Chrysler and General Motors money from the $700 billion financial bailout package passed by Congress in September.
Even though the rescue plan is under way, Hudgins said he doesn't believe it will make people buy cars.
"The banks haven't loosened the credit standards. In fact, they've tightened it up. It's worse," he said. "If you don't have excellent credit, you can't finance a car. They're not taking anyone with glitches in their credit. And very few people have 700-plus credit scores. That's the only people they're lending money to."
Hudgins predicted that many dealerships will be forced to close during the next 60 days. But he's not planning on being one of them.
"A lot of people didn't save money when times were good. I'll be alright through 2009. I'm hoping that when Barack Obama gets into office and does the things he's going to do, that will help to stabilize the economy in a hurry," he said. "It won't be like this forever, and I want to be around when the turn-around comes."
Neal Wilson, manager of Dan Vaden Chevrolet, Cadillac and Buick at 121 Altama Connector, said he thinks that the automotive bailout may be the boost that his company needs.
"I think that the bailout is a good move by government. It's going to help the manufacturer get back on its feet," he said.
Wilson said that it will help his dealership, as well.
"It does affect us on our level. We have warranties and service thousands of customers.
"And we have 50 people employed here. It is a big deal," he said. "We've seen a 50 percent increase over October, which was our worst month. So people are coming back out. There is more consumer confidence, especially now that they know the company (General Motors) isn't going away. We're glad to see that."
The General Motors financing arm, GMAC, has started to use the first loan installment of $4 billion, part of a $9.4 billion total loan, to loosen lending standards. GMAC hopes that will help General Motors' customers buy cars.
Chrysler also needs $4 billion by the end of March, but its loan details have not been disclosed.
These loans are geared at keeping General Motors and Chrysler afloat until they can finalize a long-term viability plan.
According to the legislation, the deadline by which the companies must provide a new plan for profitability is March 31.
If either GM or Chrysler fail to meet criteria concerning their business practices, it would be forced to repay the loan immediately, which likely would send the company into bankruptcy.
To see more of The Brunswick News or to subscribe to the newspaper, go to http://www.thebrunswicknews.com/.
Copyright (c) 2009, The Brunswick News, Ga.
Distributed by McClatchy-Tribune Information Services.
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