At GM dealerships, uncertainty is in the air

updated 4:51 p.m. ET May 31, 2009

HAMILTON, Ohio - In vehicle showrooms across the country, questions about the future of auto giant General Motors Corp. add to the usual haggling and give-and-take.

Car shoppers have been kicking the tires a little more cautiously as salespeople try to ease their worries about service warranties, resale values, and even whether GM dealerships will still be around in another year.

The general manager of Rose Chevrolet in this southwest Ohio city gathered his sales force this weekend ahead of announcements expected Monday that will shape the outlook for a company long intertwined with much of America’s daily life.

“Here’s what we need to stress, guys,” Ed Larkin said at the dealership along a busy highway. “Rose Chevrolet is going to be here; we’re going to be here selling vehicles and here to service their vehicles. That isn’t going to change.”

But GM’s troubles — the company is considered likely to file Monday for bankruptcy court protection — are a concern for those who own or are considering buying one of the company’s vehicles in a recession that’s eroded the financial security of many households. Customers concerned about being able to service those vehicles must consider GM’s plan to force 1,000 to 1,200 underperforming locations to close their doors as the automaker tries to thin dealer ranks to remaining outlets more profitable.

GM plans to cut more than 2,600 dealers by 2010. The company expects to lose 500 Hummer and Saturn dealers when those brands close or are sold, and it expects 400 dealers to close voluntarily. Another 500 would be consolidated into other dealerships.

Interactive GM's road to bankruptcy A look at key events in General Motors' long and sometimes troubled history.

“This is a major purchase by consumers; they don’t make it very often and they want more stability,” said Michael Robinet, vice president of global forecast services for CSM Worldwide, an auto industry consulting company based in Northville, Mich. “Consumer loyalty has been shaken by a lot of factors.”

Leo Chavez, a Chicago-area realtor, said he’s feeling GM’s pain himself. He’s been trying to get out of his Pontiac Grand Prix, a discontinued GM line, but said its trade-in value has fallen and dealers use that against him in bargaining.

“I’m very disappointed with GM, I really am,” Chavez, 30, said Saturday at Chicago’s Grossinger City Autoplex, where he wanted to trade for a used Toyota Camry. “I have more faith (in) Toyota.”

Just outside the nation’s capital, jazz played in the showroom of an Alexandria, Va., dealership Saturday as veteran car salesman Earl Jones, 50, talked about a year that has been “like being on a rollercoaster.”

Foot traffic and sales have slowed at the dealership, he said, and customers have become bolder in demanding bargains on GM cars.

“People come in and they ask us for the most ridiculous deals,” Jones said, but added he’s going to stay positive as he keeps selling cars.

“They control what they’ve gotta control,” he said of GM’s leaders. “In here, I’ve got to control my destiny.”

Linda Bentley, 61, scanned the car lot with a salesman for the 2009 Malibu she planned to buy. The retired federal employee typically buys American-made cars, but GM’s situation nearly scared her off.

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