Staff Writer 

Some General Motors dealers in Maine will know within a day if they’ll continue to carry new GM cars on their lots. 

Maine Automobile Dealers Association President Tom Brown said some Maine dealers received letters last week informing them they no longer would receive new GM cars after October 2010. Brown said 47 dealerships in Maine have new General Motors’ automobiles on their lots. 

“[General Motors] says in order for them to continue to operate under the realm of the bankruptcy court, this is what they have to do,” he said. “Dealers all over the country received these letters.”

General Motors Manager of Dealer Communications Susan Garontakos said two different types of notifications have been distributed to 1,350 dealers throughout the country. Garontakos said each notification was unique based on the dealer’s location and sales record and contained information to help them adjust as the bankruptcy proceedings “move along.” 

She said some dealers were informed to tighten standards to continue doing business with GM. Other dealers were told the contract with the company would expire in October 2010. 

“We call that a wind-down agreement, which the dealer will need to review and sign in order to receive support from GM for finances or help with selling their inventory,” she said.

Brown said some dealerships will survive the contract changes.

“In the end, there will probably be some dealerships that have to close,” Brown said. “There are others that will still be able to sell other automobiles.”

Dean Walker is the owner of Walker Chevrolet in Parsonsfield. He said the 85-year-old dealership has typically kept between 25 and 30 GM cars in inventory, but had recently let that number drop to fewer than 10.

“I didn’t know, with the bankruptcy getting close and all that, I was unsure so I let it go down. Now I don’t have enough,” Walker said. “I just don’t know, for the first time in my life. It’s really a bad time to be a dealer.”

Walker said he received a letter from General Motors informing him he could still receive General Motors cars after October 2010 as long as his dealership complied with a new set of standards. Walker said it was considered a “good letter,” but could still cause him to discontinue his inventory of GM cars.

“There are a lot of requirements to get on the good side,” Walker said. “We’re signing off on a lot of franchise rights that have been protected and, for me, I’d have to build a new building. They want a stand-alone GM building. Basically they want me to look like Quirk Chevrolet [in Portland] – in Parsonsfield. I don’t even know if I could get zoning for that.” 

Garontakos said other requirements suggest merging two separate dealerships into one, limiting the number of brands of vehicles that a dealer can carry or that dealers relocate to maximize potential to benefit from the sale of GM vehicles.

“We’ve done our market research, we’ve looked at the numbers,” she said. “This is what we feel needs to happen.”

In South Portland, Pape Chevrolet Sales Manager Steve Tsujiura said they received a similar notification from General Motors. He said the dealership will continue to keep nearly 500 General Motors cars on the lot after the October 2010 deadline.

“We’re in business and will continue to receive cars,” he said.

Walker said other dealerships had received notification that they could not receive GM cars after October 2010, a “bad letter.” He estimated at least 16 Maine dealerships could close due to the lack of GM cars in their lots. Garontakos said General Motors’ decision to discontinue contracts with dealers also was based on their market research. She said in the instance of a contract not being renewed, General Motors was making an effort to assist dealers in “getting out of the business.”

“There’s an appeals process, but you don’t know if they’ll take it seriously or just ignore you,” Walker said. “And none of it’s public, so who knows if they’re granting these appeals requests or not.”

Garontakos said General Motors agreed to keep the names of dealerships issued “wind-down” agreements confidential. Calls to Frank Galos Chevrolet in Saco, Quirk Chevrolet in Portland and Lee Auto Mall in Westbrook were not returned by Sentry press time.

“We feel it’s a very personal decision between GM and the dealer, who can tell their story if they want to,” Garontakos said.

Garontakos said all GM dealers had until June 12 to respond to the notifications. 

   Staff Writer Nate Jones may be reached at 282-4337 ext. 233.