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Closing dealership fielding customers' questions

Harmon Cadillac in Dayton to close at year’s end

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By John Nolan, Staff Writer Updated 10:31 AM Wednesday, June 10, 2009

DAYTON — Employees of Harmon Cadillac were fielding questions from customers Tuesday, June 9, after the Dayton dealership revealed that General Motors Corp. doesn’t want to keep Harmon in its dealer network for the long term.

The dealership at 530 N. Main St. is making plans to close at year’s end and sell off its inventory, said John Allen, executive vice president of Harmon Cadillac.

Harmon informed its employees last week of GM’s decision. After news reports about it Monday, customers wanted to know more, Allen said Tuesday.

“We have people in the showroom this morning, asking questions and finding it hard to believe that it’s good for anybody,” Allen said of GM’s decision. “But, it is what it is.”

Several other auto dealers in the Dayton region noted that it would be difficult for a dealer to acknowledge that an automaker no longer wanted to continue a business relationship, out of concern that it would drive away customers or current employees might look elsewhere for jobs.

Harmon Cadillac is the first local dealer to acknowledge a negative response from GM. Harmon’s ownership believed that its work force of more than 30 employees deserved to know what GM had decided, Allen said.

“The Harmon family has always been concerned about taking care of our employees,” he said.

The dealership has operated since the 1930s, and since 1990 under the Harmon name. Allen said Harmon Cadillac has filed an appeal with GM, but he isn’t optimistic about the outcome.

GM has entered bankruptcy reorganization to continue operating under U.S. Bankruptcy Court supervision. The company said it will not publicly identify dealers that it intends to drop from its network after current agreements expire in October 2010.

Chrysler LLC, which also is in bankruptcy reorganization, has identified in court the dealers whose franchise agreements Chrysler is terminating.

Regional dealers including Bob Ross Buick, GMC; White-Allen Chevrolet Subaru; Fairborn Buick Pontiac GMC; Serra Chevrolet; Voss Chevrolet and Voss Village Cadillac; Boose Chevrolet, Joe Johnson Chevrolet and Jeff Wyler Springfield said Tuesday they had received GM letters assuring them of continued participation in GM’s dealership network as the automaker works its way through bankruptcy reorganization.

GM intends to reduce its current network of about 6,000 dealers nationwide — including about 1,400 Cadillac dealerships — to 3,600 overall, company spokeswoman Elaine Redd said.

GM’s standards for determining whether to keep or drop dealers included examining their sales effectiveness, working capital levels, customer satisfaction, dealership location and number of dealers in a market, Redd said.

GM’s thinning of its dealer ranks could hurt consumers by lessening market competition, said John Heitmann, a University of Dayton professor and auto historian.

“A multiplicity of dealers gives consumers the ability to make a choice and work a good deal,” Heitmann wrote in an e-mail response Tuesday. “When dealers are taken out of a community, ultimately it is consumers who are placed at a major disadvantage.”

Contact this reporter at (937) 225-2242 or jnolan@DaytonDailyNews.com.

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