Updated 12/03/2008 09:23 AM
What car dealers are saying about possible auto bailout
ALBANY, N.Y. -- After the leaders of the big three automakers went to Washington, were criticized for using private jets to get there and asked for $25 billion from the government, it seems even they're admitting there's a problem. Some CEOs are now saying they'll take $1 a year in pay. And one Albany car dealer agrees.
"Nationally, there's problems. Sales are down," said Orange Motors Vice President Carl Keegan.
Keegan said all the bad news has forced dealers across the country to drive down expenses.
"I put oil, waste oil heaters in the shops which is taking 30 percent of my cost of heating the shop, heating with the waste oil from the cars. So we're getting creative," Keegan said.
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Keegan admits any bailout would take time to make a difference at the dealership level, but in time, it could help with fuel efficiency, ways to make the fleet more relevant. This, as Ford, for instance, says they're looking to close over 600 dealerships across the country by next year even as they hope to break even within two years.
"They feel they have too many," said Keegan. "We're selling the same amount of cars as Toyota. They have 2,000 dealers. Ford has 4,000 dealers. It just doesn't equate. It doesn't work. I don't think Ford will cut anyone. I think some will run out of cash and go out of business."
But even with all the tough economic news that we've been hearing month after month, dealership folks we spoke with here say it's not all bad.
Keegan said, "Year over year the dealers are just about holding from last year. There are some outlying dealers that are small dealers on the outskirts that aren't having the success they've had but the metropolitan dealers are holding pretty strong."
With end of the year sales, Keegan said for those ready to get a new car, now may be a good time to buy - as the Washington debate continues, dealers watch, and Americans are left hoping those behind the wheel of any possible bailout plan really do have a roadmap to profitability.
Auto leaders will testify before Congress later this week. And this isn't just an American Car Industry problem. With the numbers that came out Tuesday, Toyota Sales were down 34 percent from this time last year. Ford says its light vehicle sales were down 31 percent.