General Motors to cut ties with Wolf Chevrolet

By Alex Gary

BusinessRockford.com

Wolf Chevrolet, a General Motors dealer since 1924, learned today that the world’s No. 2 automaker will not renew its franchise agreement in late 2010.

A day after Chrysler LLC moved to eliminate nearly 800 dealerships, General Motors Corp. told about 1,100 U.S. dealers today that their franchises will not be renewed late next year.

John Wolf, the third-generation leader of Wolf Chevrolet, verified that his dealership was among the 1,100.

“I’m not going to lie to you. I did (receive a letter from GM),” Wolf said. “With economic conditions as they are, I don’t think anyone knew what would happen today.”

The cuts are part of a larger GM plan to slash 2,600 of its 6,200 dealerships as the automaker tries to restructure to become profitable again. The moves likely will cause the loss of thousands of jobs across the nation. Governments will lose thousands of dollars in tax revenue as dealerships are forced to close.

Both Chrysler and GM say they are cutting dealers because they have too many outlets that are too close to each other, and the competition drives down prices. But as the ranks of dealers thin and competition decreases, that likely will mean higher prices for car and truck buyers.

As GM and Chrysler lost market share to Japanese and other overseas brands, the automakers, as well as Ford Motor Co., ended up with too many dealerships. Many are barely getting by and can’t afford to upgrade their facilities or hire the best personnel to compete with the Japanese, who have far fewer dealerships.

Unlike Chrysler, which included a list of franchises being eliminated in its bankruptcy filings, GM left it up to individual dealers to make public whether they were being eliminated.

Of the other GM dealers in Boone, Winnebago and Ogle counties, officials from Napleton Auto Werks, which has a Cadillac franchise, and Sawicki Motor Co. of Rochelle, which sells Chevy, Cadillac, Buick and Pontiac, had not received letters by midday, most likely meaning they’ll remain in GM’s dealer network beyond 2010.

Bachrodt Motors, which has Chevrolet, Pontiac, Buick and GMC franchises, also did not receive the dreaded letter and will continue with GM. Thursday, Bachrodt learned Chrysler was pulling its Jeep franchise.

Jack Wolf Pontiac, Cadillac, GMC — which is owned and operated by Bill Wolf’s brother — Henneberry Buick in Belvidere, and Peters GMC in Rochelle had not returned phone calls by midday. Brian Bemis Auto Mall, which has Pontiac and Buick along with Dodge, Chrysler and Jeep at its Oregon dealership, had not returned an e-mail.

Thursday, three dealers with Chrysler franchises learned their agreements were being terminated, including Belvidere Motors, which had a Dodge franchise, and Strandquist Motor Co., which had the Chrysler line.

Like Strandquist, John Wolf said he plans to continue running his dealership as a preowned-only dealership.

“Our thoughts are to have the best service department, the best parts department and the best body shop in the area,” said Wolf, who has 33 employees and has turned down “many” opportunities to pick up brands along with Chevrolet.

“We have been very loyal to Chevrolet. This is a very tough day.”

The Associated Press contributed to this report. Reach Assistant Business Editor Alex Gary at agary@rrstar.com or 815-987-1339.
 

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