The Times-Journal

Tuesday, February 9, 2010 | DeKalb County's Oldest Newspaper

Classifieds | Jobs | Homes | Autos

GM plan won’t affect local dealership

By Jared Felkins
The Times-Journal

Published June 1, 2009

With the news Monday that General Motors filed for Chapter 11 bankruptcy protection, at least one Fort Payne dealership owner says the car giant should emerge as a more solid company.

Eddie Johnson, who co-owns Woodson Jones Chevrolet with Rex Miller and Shan Bruce, said the Fort Payne dealership is weathering the economic storm despite recent dealership closing announcements across Alabama.

“The good news is they sent out 1,100 letters, and we didn’t get one,” Johnson said. “I can’t say the same for some dealerships within a 40-mile radius.”

In fact, Johnson said sales in March at Woodson Jones were the best since August 2008 and April numbers nearly mirrored that of March.

“The bigger cities with five and six dealerships in them, they may not fare as well,” Johnson said. “I think we are going to be in good shape.”

Johnson, Miller and Bruce bought the company on March 10. Johnson said the buy was an indication of General Motors’ willingness to retain the dealership.

“I feel like we are in good shape,” Johnson said. “I feel like if they didn’t want us to have it, they wouldn’t have let us buy it.”

Devan Lowe Pontiac Catillac GMC management could not be reached for comment Monday.

The GM bankruptcy announcement Monday comes as part of the Obama administration’s plan to shrink the automaker to a sustainable size and give a majority ownership stake to the federal government.

GM’s bankruptcy filing is the fourth-largest in U.S. history and the largest for an industrial company. The company said it has $172.81 billion in debt and $82.29 billion in assets.

GM will rely on $30 billion of additional financial assistance from the Treasury Department as it reorganizes. That’s on top of about $20 billion in taxpayer money GM already has received in the form of low-interest loans.

GM will follow a similar course taken by Chrysler LLC, which filed for Chapter 11 protection in April and hopes to emerge from its government-sponsored bankruptcy this week.

The plan is for the federal government to take a 60 percent ownership stake in the new GM. The Canadian government would take a 12.5 percent stake, with the United Auto Workers getting a 17.5 percent stake and unsecured bondholders receiving 10 percent. Existing GM shareholders are expected to be wiped out.

Trading of GM shares was halted early Monday after they plunged Friday as low as 74 cents, the lowest price in the company’s 100-year history. GM will be kicked out of the Dow Jones industrial average because rules established by the News Corp. unit that oversees the index prohibit it from including companies that have filed for bankruptcy.

– The Associated Press contributed to this report

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