December 12, 2008 - Colorado Dealers, Silverthorne CO

Summit County auto dealers turn to service for survival

With national news screaming about auto-industry bailouts — touted as a way to save jobs and prevent bankruptcy — locals are probably wondering: “What’s up with the local car dealerships?”

Two Summit County auto dealers — Summit Ford and Hudson Auto Source — are combating the same economic crunch felt nationally by turning to auto services to supplement low car sales.

“Gas prices were high this summer, so Ford switched everything over and started manufacturing economical cars,” said Ryan Ramsey, general manager of Summit Ford in Silverthorne. “Up here, it’s a little bit of an anomaly because people need four-wheel-drives, and there’s a lot of construction/industry type stuff that people need trucks for. But total volume is off. My vehicle sales are off by about 20 percent.”

National sales dropped in November by more than 40 percent at three automakers — Chrystler, Nissan and General Motors.

Toyota, Honda, Ford and BMW sales all dropped by about 30 percent.

“Who knows about (national) numbers — everybody seems to have something different,” said Glenn Jordan, general manager of Hudson Auto Source in Silverthorne. “It’s not as horrible as everything’s talking about. It’s not all doom and gloom. Vehicles are selling, despite lower numbers.”

Jordan, whose auto dealership carries Chevrolet, Pontiac, Buick, Cadillac and GMC, compared his own sales numbers to national sales.

According to numbers Jordan received recently, Ford, GM and Chrysler sold 363,359 vehicles last month nationally. Toyota, Honda and Nissan had a combined total sales of 253,145 vehicles.

But with or without car sales, the local dealerships are prepared to weather the storm.

“Whether it’s a good economy or a bad economy, the key is ... overhead, employee retention and finding good people, focusing on your ability to survive without selling any cars,” Ramsey said. “We’ve put ourselves in that position ... This is more of a service-oriented facility. Our main focus is on our parts and service departments.

Obviously we want to sell cars, but we have the ability to survive by not selling very many cars, just because of our expense control and our service department.”

Summit Ford provides service for 30 to 45 cars daily, Ramsey said, and he sees auto dealers going that direction nationally.

“They have to, or they’re going to close,” he added.

Jordan agrees.

“Let’s say everyone goes bankrupt,” Jordan said. “You’ll still have to service all this stuff. Maybe the focus goes away from sales and is on service. Who knows? You take it day by day and don’t listen to the news too much.”

He predicts that the industry will rebound.

“The auto industry is not going away,” Jordan said. “It’s just growing pains. If bad things happen, people will be out of work. But I doubt that’s going to happen.” But, what about the bailout?

If it doesn’t happen, the nation will suffer, Ramsey said, because so many jobs are tied to the industry. There will be a chain reaction with many different companies, including dealers, suppliers and manufacturers.

“The bailout is a bridge loan,” Ramsey said. “The burden is still on the automotive manufacturers, and it’s a better decision than bankruptcy because bankruptcy puts that on the taxpayer’s shoulders. I don’t want to see that happen.”

Though Ramsey thinks that Ford will have enough cash to weather the storm, he said: “I do believe that Chrystler, Ford and GM need to take a new perspective on the way they do their business on the manufacturing side. They need to make it economical and make it profitable.”

According to Jordan: “We’re going to pare back and be intelligent. I’m not spending money like it’s going out of style. But we’ll be here.”

Original Story - Summit Daily News