Major GM Dealer Bill Heard Goes Out Of Business
By Daniel at 25 September, 2008, 8:02 am
Major GM Dealer Bill Heard Goes Out Of Business
Last Update: 9/25/2008 7:37:50 AM
By Sharon Terlep
Of DOW JONES NEWSWIRES
(This article was originally published Wednesday)
DETROIT (Dow Jones)–Bill Heard Enterprises Inc., one of the nation’s larger
Chevrolet retailers, went out of business on Wednesday, the latest victim of
turmoil roiling the domestic auto industry and its vast dealer network.
The demise of the General Motors Corp. (GM) retailer, with 13 U.S. stores and
2007 sales of $2.1 billion, is the highest profile dealership collapse in recent
months. A slew of domestic-brand dealers have been forced to close by the
combined impact of tanking truck sales, soaring fuel costs and the national
credit crisis.
“Rising fuel prices, a product portfolio of mostly heavy trucks and sport utility
vehicles, economic recession, unfavorable local market conditions for vehicle
sales, the crisis in the banking and financing sectors, and other factors
combined to create a business environment in which the company simply did not
have the resources needed to continue to operate,” the dealership said in a
prepared statement.
The closure was first reported Wednesday by trade publication Automotive News.
Domestic brand dealers across the U.S. are becoming increasingly strained as
Detroit’s auto makers and their once-profitable financing units move quickly to
cut losses, making it tougher for customers to get financing and more expensive
for dealerships to operate.
Earlier this month GMAC LLC, the financing company partly owned by GM, stopped
doing business with Bill Heard over concerns about financial losses related to
the privately owned chain.
The loss of some dealers could eventually benefit GM, Ford Motor Co. (F) and
Chrysler LLC, each working to shrink their dealer networks. Detroit’s auto makers
are saddled with an excess of dealers from the days when the companies commanded
a much larger share of the U.S. market. The auto makers believe fewer, healthier
dealers will deliver better profitability and more customers.
But, in the short term, tumult among dealers threatens to cut further into the
auto makers’ sales.
GM spokeswoman Susan Garontakos said of the closing, that Heard is “an
independent businessman and has the right go ahead and do that.”
When dealerships close, she said, GM typically determines whether the stores
remain viable sales locations. If they are, the auto maker will work to keep them
open by consolidating them into other stores or finding a buyer.
GM shares lost 3.5% to close Wednesday’s session at $10.35. The shares, which
have lost about two-thirds of their value over the past 12 months, have lost
ground in three straight sessions, giving up 21% during that period.
The shares have swung wildly in recent weeks as investors mull the impact that a
weakening economic environment and tighter credit conditions have on GM’s
financial health, while weighing the possibility that the company could gain
access to $25 billion in low-cost government loans.
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