Hidalgo, Starr GM dealers survive cut

McALLEN — Most of the Rio Grande Valley's General Motors dealers said they survived the cut Friday, as GM told 1,100 dealerships across the country their franchise agreements will not be renewed next year.

GM franchise dealers in Hidalgo and Starr counties said that despite some concern the axe might fall close to home, their lots were spared. As of Friday it was impossible to verify the information as GM has refused to publicly disclose what dealerships they are shuttering.

"We are cleared to go. Thank God," said Kirk Clark, owner of the Clark Automotive dealerships. "I wasn't worried about us ... but it's kind of a frightening thing waiting for the possibility."

Clark and other dealers said they survived the cuts because automobile sales in the Valley are strong despite the recession.

It wasn't clear Friday if all Cameron County lots avoided the cuts.

The Gillman Auto Group said they survived, as did other GM franchises.

"I haven't received anything," said Johnny Feliz, operations manager for Cardenas Motors in Brownsville. "But, even if we had, I don't know that you're going to be able to get an answer."

Cardenas had already received word from Chrysler on Thursday that it was one of 789 Chrysler dealerships that will be closed, including four in the Valley. Cardenas said at the time that the lot at 1500 N. Expressway 77/83 would still continue to sell Buicks and GMC vehicles.

Ed Payne Motors was also informed Thursday that it would lose the Ed Payne Jeep-Eagle franchise at 1101 S. Commerce St. in Harlingen. The lot will still exist as a pre-owned Mitsubishi dealership and for now it will still service Chrysler automobiles.

Otherwise, Payne retained its Chrysler franchise for the massive Ed Payne Motors dealership in Weslaco. Bud Payne, co-owner of the Payne automotive group, added that his GM franchises were not part of the latest round of cuts.

The axe also fell on Bert Ogden Chrysler-Dodge, but owner Bob Vackar said that wasn't entirely surprising. Chrysler executives had told him that if he wanted to retain his Chrysler franchise, he couldn't share that lot with Kia.

"I can't go out and spend $4 million on a brand in bankruptcy," he said about the cost of moving to a new location without the Kia franchise. "That's why we parted ways."

The lone GM franchise in Starr County, Rio Motor Co., said it did not receive a letter Friday.

"It's been a tough year for us," said owner Billy Canales. "It's basically up to us now to make it through."

The GM cuts are part of the company's restructuring plan announced last month to shutter more than 2,600 dealers by 2010. GM has said that about 400 dealers are expected to close voluntarily and that another 500 would be consolidated, in addition to the cuts announced Friday. Saturn and Hummer dealers will also be cut.

The GM franchises informed Friday will be cut loose by October 2010. Chrysler will stop supporting the lots the company is closing on June 9 of this year.

GM's cuts will likely have a much greater economic impact than Chrysler's because a large number of Chrysler lots sell other brands and will remain open. Many GM dealers sell only GM vehicles.

Locally, both Bert Ogden and Ed Payne Motors said Chrysler cuts will not translate into job losses and that all staff will be retained to help with the other brands.

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Brownsville Herald reporter Aaron Nelson contributed to this story.

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Sean Gaffney covers business, the economy and general assignments for The Monitor. He can be reached at (956) 683-4434.