Only some dealerships celebrate bailout

December 19, 2008 6:03:21 PM PST
The struggling auto industry is getting billions in a bailout package approved by the President. President George W. Bush is pulling $17.4 billion from the Wall Street bailout fund -- with G.M. immediately getting $9.4 billion and Chrysler $4 billion. Regardless, there will be strings attached to this life-line.

Some of those strings include things like no more corporate jets or huge management pay checks, if the auto industry expects any more help from Washington. That money won't change the situation at Central Chevrolet in Fremont. It will close after 71 years in the business. They say they can't stay in business if they can't sell cars.

"In the last few months is when the bottom has really fallen out," said Jim Brunelli, a Central Chevrolet owner.

Brunelli's family has owned and operated Central Chevrolet in Fremont for 71 years. On January 8th the doors will close forever. The promise of a $9 billion loan to GM this month and next won't save them.

"People aren't coming in to buy cars. Hopefully that will help the manufacturers to bridge the time when the economy starts succeed a little, but at this period of time that's what we're facing. People aren't coming in," said Brunelli.

Brunelli says people aren't buying because they don't have any confidence in the economy. The loans were seen as necessary to instill confidence in the auto industry, and the millions of jobs tied to it.

Management will be required, unions will be asked to make concessions. Sergio Santos is the UAW president for NUMI in Fremont -- California's only car maker. He says the unions have already made many concessions.

"I think G.M., Chrysler and Ford have to look in their own backyards because we've already looked in our in 2005, 2006, and 2007. We've already made concessions to those companies," said Santos, President of UAW Local 2244.

Mike Tarr bought the first Chrysler sold at San Jose's Steven's Creek Chrysler after the loan announcement was made.

"It's about time it happened and it's going to help the country. It's the only way to do it, otherwise the amount of people who would be out of work would be absolutely horrible," said Tarr.

Stevens Creek Dodge has seen its sales drop more than 40 percent over the past year. General Manager Bob Mann says the loan to Chrysler will help convince people the car they buy will be serviced and its warranties honored.

"We've been trying to focus on keeping the customers we do have the existing customers happy and making sure to them were going to be around," said Mann.

The loan to G.M. and Chrysler is expected to keep the companies afloat through February 2009. By March the companies are expected to come up with a viability plan in order to convince lawmakers to give them any more money.


Load Comments