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Local vehicle industry keeps eye on automotive bailout
By JOELLEN CHESNUT
Era Reporter
joellen@bradfordera.com
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| Era photo by Francie Long |
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Local car dealerships and auto parts stores are hoping the current instability with the nation’
Ford Motor Co., General Motors Corp. and Chrysler LLC re-submitted a proposal for assistance to Congress this week. The three companies’ CEOs will all travel to Washington via car to discuss the plan Thursday and Friday.
Ford is requesting $9 billion as a backup but claims it is unlikely to need the funds, while GM is requesting $12 billion, with predictions it won’t be able to operate without the assistance and will drag the economy down with it when it defaults. Chrysler is requesting $7 billion in assistance, with concerns the company will fall under minimum required funds to run the company by the first of the year without such support from the government.
So far, the main factor inhibiting business for area dealerships is the restrictions on credit approval.
“I think, really, local people are domestic car-oriented and seem to be coming in and buying cars. There is more trouble with getting financial approval, that is the current problem,” said Joe Kightlinger of Kightlinger Automotive Group in Coudersport on Tuesday.
Kightlinger voiced his belief that improvement will occur with the passing of the proposed auto loan.
“Once they get the financial package they need, that will relax people further and things will get better,” Kightlinger said. “Truthfully, for us, things are already better then they were in October, when I think the election and stock market had people riled up. November was OK, it is not great now but it’s not terrible either.”
Across the state line, sales seem to be usual for the winter season.
“It’s hard to say if we’re seeing any effects. It is always quiet this time of year. November, December and January is usually down time for the auto industry,” observed Mark Bokman of Rik Bokman, Inc. in Olean, N.Y. “We are doing very well though, our numbers are up considerably from 2007.”
Bokman also expressed belief that improvement will come with the approval of the proposed loan.
“If the plan goes through, it will free up other marketing efforts, new product introduction,” said Bokman. “It is something that has to be done. I don’t think there is any way around it really.”
With the decrease in new car sales, the future for auto parts stores could look slightly brighter. Car owners will invest more in keeping their current car running when buying a new vehicle is just not financially feasible.
“I have seen that happen before, this is an up-and-down type of industry,” said Fred Cloud, manager at NAPA Auto Parts in Bradford. “When new car sales fall off, people spend more keeping their vehicles running. I expect to probably see a little more of that after the first of the year sometime. It will take that long to trickle down to us.”
This will be a welcome change, as Cloud noted this year has been one of struggle due to increasing prices for parts and supplies.
“Our business is based on the petroleum industry or something made out of metal, so prices in last year have continually been driven up due to the increase in the price of steel, and prices on petroleum-based products have gone up with the oil prices and don’t seem to be affected by the current decrease in the price of oil,” Cloud explained.
“We are making less and less. We try to hold the line on pricing, but it gets more difficult to do that with increases we keep getting hit with; prices on shipping, parts, and lately manufacturers have been hitting us with fuel charges. I don’t feel we should charge a delivery fee while we offer a delivery service. We have gotten close to that, to be honest, but we have not started charging one yet.”
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