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Tough sell for Colorado car dealers

Two among group touting rescue plan during visit to D.C.

By James Paton, Rocky Mountain News (Contact)

Published December 11, 2008 at 12:05 a.m.

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Tree King, a sales consultant at the Grand Pontiac, Buick, GMC and Kia dealership on 104th Avenue in Thornton, prepares paperwork for a car sale Wednesday. Two car dealers were among Coloradans who met with lawmakers this week to push a government aid plan for U.S. automakers.

Barry Gutierrez © The Rocky

Tree King, a sales consultant at the Grand Pontiac, Buick, GMC and Kia dealership on 104th Avenue in Thornton, prepares paperwork for a car sale Wednesday. Two car dealers were among Coloradans who met with lawmakers this week to push a government aid plan for U.S. automakers.

John Schenden

John Schenden

John Medved

John Medved

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Colorado car dealers John Medved and John Schenden have struggled to close the deal this year because of a credit crisis and a souring economy.

Selling a $14 billion loan plan to rescue the Detroit automakers has been equally challenging.

The plan was approved 237-170 in the U.S. House on Wednesday night, but faces fierce opposition among Senate Republicans. Some believe the companies should be left to fail.

"It's frustrating," Medved said by cell phone Wednesday as he waited to board a plane in Washington prior to the House vote. "I think some people understand what the ramifications are, but others are standing on principle and not taking into consideration what those ramifications are. We're talking about a lot of carnage and suffering."

Medved, who was on his way back to Denver, said he worries about millions of lost jobs across the country should the major automakers go belly up. A number of businesses in Colorado, such as Bestop, a maker of tops for Jeeps, and Gates Corp., a supplier of belts and hoses, would feel the impact, he said.

That's not to mention the dealerships, which are significant employers and civic boosters.

"The communities count on us for more than sales and service," Medved said, adding that his business supports an array of causes, from the Salvation Army to his parish in Golden, St. Joseph Catholic Church.

Medved, Schenden and a couple other Colorado representatives met with lawmakers in Washington this week to back the rescue effort. They had dinner on Tuesday with Rep. Doug Lamborn, a Colorado Springs Republican - who voted against the loan plan - and talked with Sen. Ken Salazar and outgoing Sen. Wayne Allard on Wednesday.

The program calls for a car "czar" who could force General Motors and Chrysler into bankruptcy if the companies don't come up with a viable restructuring plan by March 31. It would provide low-interest loans and ensure that taxpayers are first in line to get repaid.

"It gives them 110 days to get their act together," Schenden said before he boarded the plane to Denver. "We're not talking about a lifetime program."

Senators' outlooks differ

Allard, a Republican, signaled that he would take their perspectives into account, according to the two car dealers. But Allard's spokesman, Steve Wymer, said early Wednesday evening that the senator is firmly opposed.

"The senator voted against the financial industry bailout and he cannot find a reason why he shouldn't oppose this one as well," Wymer said. "It's a gross burden to the taxpayer" and aiding only a couple of companies could put other businesses at risk.

Salazar, a Democrat, told reporters that Detroit would need to "change how it goes about doing its business. Second of all, we need to push the Big Three toward building advanced, efficient vehicles. Three, we need to have tight restrictions on executive compensation."

Still, he backs the plan.

"We can all be critical of Detroit and the fact that they stuck their head in the sand for far too long," he said, according to a transcript provided by a spokesman. "But the fact is that there are millions of Americans whose jobs and whose families are dependent on those jobs who are very much at risk here. So we need to do all we can to keep those jobs alive."

Jobs have taken hit

The Colorado car dealers are behind the automakers despite the fact that the companies have said they will need to cut dealerships to survive.

Tim Jackson, of the Colorado Automobile Dealers Association, said in mid-November that he could "count on one hand" how many dealers in the state had been shut down.

But that number is on the rise.

"No question," Schenden said.

The situation is already bleak for dealers, which have been clobbered by high gas prices earlier in the year, tighter credit and declining consumer confidence.

Schenden said he has cut his staff at Pro Chrysler Jeep to 62 from 83 in the past year and has watched new car sales in 2008 drop by more than 50 percent.

Medved, who runs the company with the same name, said that he has laid off roughly 300 of his 600 employees in the past year and a half, and sales of his GM and Ford cars have declined about 50 percent in 2008.

Comments

  • December 11, 2008

    10:51 a.m.

    Suggest removal

    David_R writes:

    At least the local dealers who went to Washington in order to lend support for the industry bailout didn't include the "Dealin" Doug Moreland. Visually, with his over abundance of gaudy jewelry the man provides a stereotypical view of everything that is wrong with the industry. Congressmen seeing his jewelry laden body would have equated it to the CEOs flying their own jets into DC.

  • December 11, 2008

    11:53 a.m.

    Suggest removal

    SheikYurBooty writes:

    As long as Allard and Lamborn hate the UAW more than they care about al the non-union people who will be hurt, they will continue to vote "no."

  • December 11, 2008

    2:14 p.m.

    Suggest removal

    FCZ writes:

    No Federal Taxpayer bailout.

    Chapter 11 works best.

  • December 11, 2008

    5:10 p.m.

    Suggest removal

    youngman writes:

    No Bailout...it is just a union protector....time to come back to reality...you can't get paid $80,000 a year to screw on a bolt....

    Sorry unons buy you killed the golden goose...no all will fail.....Chrysler will...GM will be cut in half..and Ford looks like it might survive..

    I went looking for a car...to hear they are in such dire straits they did not price their cars that way......no 50% off sales yet....not like the retailers are doing

  • December 11, 2008

    6:02 p.m.

    Suggest removal

    mrfxx writes:

    So youngman writes: "No Bailout...it is just a union protector....time to come back to reality...you can't get paid $80,000 a year to screw on a bolt...."

    But a CEO can be paid 25M or more per year (plus bonuses)
    to shove gas hogs down the public's collective throat
    NOT fully fund pension plans agreed to in labor agreement after labor agreement
    manipulate the workers wages reported to include the money owed the retirees that the company (legally, I might add) neglected to fund (you are aware that "newbies" to the auto industry are making $14/hour or less per the last agreement?)
    spend money to defeat CAFE standards that could have had the US at the front of the passenger car alternatives
    offshore manufacturing jobs to raise profits - without caring that they were getting rid of a "captive market" for their goods
    ETC!
    ALL after Iacocca said that NO CEO was worth more than $250,000 per year.