Carroll P. Matherne
November 25, 2008
RoseMary Smith Giron
November 28, 2008
The Big Three automakers in the U.S. – General Motors, Ford and Chrysler – are facing possible bankruptcy if Congress does not extend them a bailout deal, and the crisis seems to be having at least some effect on Tri-parish car dealers.
The number of automobiles sold by Tri-parish Big Three dealers declined substantially throughout 2008. Dealers sold 178 cars in January, 152 in May and 95 in October.
But local Big Three dealers made up for the decline slightly by selling more trucks in October (658) than they did in January (610). Only 453 trucks were sold in June, no doubt reflecting high fuel prices.
Nationally, the effects of the crisis are more ominous. General Motors closed 260 stores in 2007 and 23 in January, but the company still had 6,753 dealerships as of earlier this year, according to Automotive News, including seven in the Tri-parishes. Those seven, along with local Ford and Chrysler dealerships, gives our area 16 Big Three car dealers.
Executives from the Big Three automakers told Congress that the collapse of their companies could mean the loss of 3 million jobs. The automakers employ 250,000 workers. Around 730,000 other workers make products for the cars.
Approximately 1 million people work in automobile dealerships in the U.S.
The automakers had to spend almost $18 billion in cash reserves last quarter to continue in business.
A spokeswoman for Southland Dodge Chrysler in Houma said the troubles the Big Three are having have not affected the dealership. “It’s business as usual,” the woman, who asked not to be named, said.
One Tri-parish Big Three car dealer who wanted to remain anonymous said the U.S. automakers need a more level playing field when competing against foreign carmakers and dealing with the autoworkers union.
The U.S. Senate cancelled a vote last week on a $25 billion bailout for the auto industry, taken out of the recent $700 billion Wall Street bailout. Instead, President Bush and congressional Republicans want to extend the car companies $25 billion from a loan fund that was originally intended to help the companies develop more fuel-efficient cars.
U.S. Sen. David Vitter (R-LA) issued releases stating he was opposed to a government bailout without a fundamental restructuring of the auto industry, particularly costs associated with the autoworkers union.
A bailout now will only lead to further requests for relief in the near future, he said.
“If we’ve learned anything, it’s that blank checks and bailouts on the backs of the American taxpayer do anything but solve the problem,” he said. “Taxpayer dollars should be married to fundamental reform. Otherwise, the bailout will just put off the day of reckoning by a few months.”
Congress may not try to take any more action on the bailout until after the Thanksgiving holiday.
The Associated Press contributed to this article.
Automobile sales among the Big Three dealers in the Tri-parishes have fallen substantially throughout 2008. Dealers sold 178 cars in January, 152 in May and 95 in October. Only 453 trucks were sold in June, no doubt reflecting high gas prices. * Photo by KYLE CARRIER
