Senators, GM and the Effect on Rural Communities

Published by julia | Filed under Miscellaneous, Real Estate, Uncategorized

Last night, I was watching the senatorial meetings on regarding GM and the closings they are proposing. I was appalled by the choices made by the GM leaders to close some of the oldest and most performing dealerships in the United States. But, more than that, I was interested in the effect these closings would have on the local community, over and above the inability to buy a new GM car or truck.

Service, Service, Anywhere?

When buying a new car, that car is covered by a service plan that keeps the buyer from having to pay for repairs out of pocket. I never once thought of these plans when GM announced they were going bankrupt. For some reason, my mind was focused on the future of so many cars that were sitting on lots just taking up space. Of course, I thought about trading in my vehicle in hopes of getting the best deal on Earth, but I digress.

These dealerships are franchises and they are being TOLD they will no longer be able to work with GM. Some are being given a year to shut down, some only 26 days. But behind the story is the fact that these dealerships do more than just sell cars, they service the cars still under warranty. What happens to the local consumer when they can no longer have their car serviced? Imagine the towing bill to have the car towed 100 miles to the next dealer.

Why Florida?

One major display of angst came from a representative from Florida. This representative was speaking about two dealerships in particular that were the best selling dealerships in Florida. These dealerships are being CLOSED.

So here is the question that we all must face. Why is GM closing the dealerships that are making money, turning a profit and offering steady jobs to a given area? If this continues, the people in the area will no longer be able to afford their homes and we will have another rash of foreclosures. GM does not have any clue, it seems, how to fix the problems they are having. But the answer is not forcing people out of work that are making money for the company. Instead, the company may need to sit down and evaluate more than the invisible bottom line and think about the choices they are making. The dealerships close, the people lose their jobs and they move away. More than that, they lose their homes and the real estate market is nearly full in terms of foreclosure capacity.