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Local Car Dealerships Hoping For Bailout Approval

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By TONY HOLT

Hernando Today

Published: December 5, 2008

BROOKSVILLE - Rick Matthews doesn't want folks calling it a bailout.

The three big American automakers are applying for a loan. The money, he said, will not go the way of the recent bailout of American International Group and others.

"This is a loan, not a bailout," Matthews said, dropping his voice to a lower pitch for effect. "They're going to pay it back the way Chrysler paid it back in '79."

He followed that by saying the chief executive officer at AIG should have been fired for callously spending the emergency money on parties, hunting trips and spa treatments.

Maybe the timing hasn't worked in General Motors' favor, but the request for $34 million in bailout money is necessary - more necessary than it was for AIG, Lehman Brothers, Citibank and others in October, he said. On Thursday, GM went before Congress along with Ford and Chrysler to make the request.

"I'm really hoping they (approve) it," Matthews said. "What GM is doing is the right thing ... They're cutting models and the union has stepped up, which makes labor more competitive."

Florida - in particular the U.S. 19 corridor - is a region rich in car dealerships. The state is third in the nation for Ford dealership employees and eighth in the nation for the number of Ford dealerships.

Greg Kowzan, general sales manager at Register Chevrolet, said someone making a one-hour drive southbound along U.S. 19 from Weeki Wachee will see up to six Chevrolet dealerships.

Perhaps that has been part of the problem, he said.

"There have been way too many dealerships," Kowzan admitted. "It's staggering ... When you have six Chevrolet dealerships within an hour, there's something wrong with that picture. There needs to be a thinning of the herd."

Both Kowzan and Matthews conceded there was a glut of sport utility vehicles and trucks sold years ago before gas prices skyrocketed, but GM and the other manufacturers were only following public demand, they said.

They agree on another issue. The hefty bailout Congress approved six weeks ago has hurt the Big Three's cause.

"All we saved were the Wall Street people," Kowzan said. "We bailed them out without question. Nobody said anything about Citbank when they went before Congress, but they keep saying we should just go down in flames."

Kowzan also is afraid that a declaration of bankruptcy would be an advantage to their customers. If it is known GM filed for Chapter 11, people would automatically jump to another brand of car.

"That's going to happen unless GM comes up with a super market plan," he said. "Bankruptcy would be bad."

Register Chevrolet suffered its worse month for new car sales in recent years. Kowzan said it was the worst month he has seen in 21 years.

Pre-owned vehicle sales are keeping the business afloat. He thinks the same trends are happening elsewhere.

In the past, the government helped Chrysler and Harley-Davidson. Kowzan thinks it should agree to more emergency money for Detroit's Big Three.

"This is about American manufacturing," he said. "We don't want to see it go down."

Reporter Tony Holt can be reached at 352-544-5283 or wholt@hernandotoday.com.

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