Suburban dealers hold on tight after Pontiac brand ends

When Ariel Szwec woke up Monday morning, he felt like his heart had been torn out.

"It was like losing a child," said the longtime manager at Sullivan Buick Pontiac GMC in Arlington Heights, which has sold Pontiacs for 46 years.

Szwec heard the announcement that General Motors will restructure to cut about 21,000 jobs and end production of the famed 80-year-old Pontiac brand by next year. GM also will downsize its dealerships about 42 percent to 3,600, all to avoid bankruptcy under a government plan.

Still, more than 2,600 dealerships nationwide that feature Pontiacs were not entirely taken by surprise, said David Hyatt, a spokesman for the National Automobile Dealers Association.

"GM indicated a couple of months ago that Pontiac, at best, would be a small, niche brand," said Hyatt. "But instead GM has decided to phase out the Pontiac brand altogether by the end of 2010 as part of its updated Viability Plan. This underscores just how difficult market conditions are."

The association is concerned that GM treats each of its Pontiac dealers and consumers fairly and equitably. Hyatt said.

"Dealers have been reassured by GM that going forward, all warranties will be honored, and necessary parts and service will continue to be available," Hyatt said.

If GM doesn't honor the warranties or if GM files for bankruptcy, the president's warranty plan will apply. The plan will cover 125 percent of the expected warranty costs from new car sales. Automakers had to contribute 15 percent of this fund and the government is contributing the rest. So warranty coverage should continue on these vehicles, said Natalie Bauer, a spokeswoman for the Illinois attorney general's office.

"If there is a problem with a car and its dealer goes out of business, the consumer can go to another GM dealership to service the car," said Bauer. "This is what happened with Oldsmobile. Olds went out of business in the early 2000s and Olds consumers took their cars to GM dealerships for service and warranty work."

In the meantime, dealers like Sullivan and others will offer other brands to keep business alive.

"This doesn't mean we're looking to add to the horrific economy," said Szwec. "We intend to operate as usual, just with one less brand."

Sullivan intends to retain its 60-some workers, despite the massive slowdown in the entire auto industry.

Even Bill Haggerty, owner of Haggerty Pontiac GMC in Villa Park, feels the same. Haggerty has sold Pontiacs since 1976.

"It's very disappointing," Haggerty said. "But that's the route the Treasury Department will go with. GM did have a plan where they were going to keep Pontiac. But now they came out with this."

Haggerty also said that while rumors were rampant over the last few months, he remained hopeful.

"Is 'angry' the word I'm looking for? I don't know. We're in business and will keep our business viable no matter what," Haggerty said. "Sure, there are a lot of emotions right now."

Haggerty said he's awaiting word from GM on what the next steps will be on discounts or incentives. This will help guide him on how to reduce his inventory and still maintain his business.

"I employee about 55 workers here and intend to stay open," Haggerty said. "We may have to get smaller, but I have no plans on giving up."

Stephen "Woody" Woodring, owner of Woody BPG Inc., which sells Pontiacs and other GM brands in Elgin, also is holding tight and wants to give the government a chance to help stabilize the ailing auto industry.

"We're taking the gamble, holding onto our people, and will see what happens," said Woodring.

He believes these business decisions were made to help keep GM alive.

"GM has its core brands, and I think it will add more models to the Buick and GMC to pump them up," Woodring said. "This is not a death sentence."