GLOVERSVILLE - Losing its contract with General Motors last month has spurred Rose Buick Pontiac GMC to transition to a used-car dealership and repair shop, an official there said this morning.
Owner Allan Rose said over the next six to 16 months, he will transition the 60-year-old business to a used car dealership and repair shop. Rose previously said the company would fight to keep its contract, but is now not confident it will be successful.
"We have submitted twice now an application to be recontracted," he said. "I don't have any false notions that they will accept it."
Rose said since the company filed for bankruptcy, whatever dealerships do to get their contracts back is unlikely to be successful.
"What takes place in bankruptcy court is going to happen, and there isn't much to be done to overturn it," he said.
GM notified 1,100 dealerships last month their contracts with the company would not be renewed. Rose said his business has the option of keeping its contract until Sept. 30, 2010, but may not do so because it would cost the company a lot of money.
He said the company will keep its contract through the end of 2009 and is unsure what will happen after that.
"We have no way of knowing how much business we will have," he said. "As long as we keep the franchise, we can continue to do warrantee work as long as it's financially reasonable. It's expensive to be a new car store. There are programs you are required to have."
Rose said the business has nearly all the equipment it needs to transition to a used car store and repair shop. It will have to free itself of the specialty parts it has and focus more on commonly repaired parts in a variety of cars, like brakes, filters and wiper blades, he said.
The company currently sells two or three used cars for every new car it sells, Rose said. That experience selling used vehicles will make the transition easier. He said the company will not limit itself to selling only certain types of cars.
The transition will mean the average price for a car at the dealership will go down, Rose said.
"We're very familiar with the used car market," he said. "We'll be carrying a lower-price-point product."
Rose said the business's 14 employees will remain through the rest of the year. After that, he said, he is unsure what staff levels the business will need.
He said he is disappointed in the way his business was treated by GM, especially considering its longevity with the company. Rose said his family has had a contract with GM for 60 years.
"I feel I was disrespected," he said. "I wasn't even given the opportunity to consider a new contract."
Rose said the contracts offered to other dealerships contained many costly requirements, including making a dealership move and forcing the dealership to spend a certain amount of money on renovations. His business may not have been interested in renewing the contract, he said.
"But I would have liked to have had the opportunity," he said.