What a difference a year makes.
Last June General Motors was staring into an abyss. Fast forward 12 months and the company has repaid around $8 billion of debt and just announced its first quarterly profit in almost three years. So yes there's been a recovery.
But it's been a rollercoaster ride for GM shareholders and employees, and for scores of the company's Hispanic dealerships, which have experienced all the ups and downs of their corporate parent.
"As GM goes so do we," says Raymond Palacios, president and owner of Bravo Cadillac Hummer, in El Paso, Texas, and sister dealership Bravo Chevrolet Cadillac, in La Cruces, New Mexico.
"GM's experience has had a definite impact on our business, there's no doubt about it. We're joined at the hip."
And that's suddenly a great place for dealerships to find themselves now that GM's fortunes have taken a major upswing.
Under the protective Chapter 11 umbrella, the former auto titan set about pulling itself back from the brink. The company embarked on a series of cost-cutting measures and other restructuring that included factory closures, shedding jobs, selling assets and a massive shake-up at management and board level.
Tom Henderson, who specializes in sales and marketing trends at GM communications, says a key part of the restructuring was the reduction of GM's eight brands to just four. Mr. Henderson says the turnaround and much of the momentum being generated is a result of taking all the existing resources, "cutting through the clutter" and focusing solely on those four – Chevrolet, Cadillac, GMC and Buick.
GM and its Dealerships
Judging from what's transpired inside Hispanic dealerships, it looks as if the GM mothership and its dealerships are being lifted by a tide of consumer acceptance.
GM is providing products consumers want and marketing support, while the dealerships are ramping up retail sales. A case in point is Mario Murgado, president and CEO of Miami Automotive Retail Inc., which does business as Brickell Buick GMC, who says his first quarter results are up 80 percent over 2009.
Even last year, one of the worst on record for many dealers as they wrestled with plunging revenue – upwards of 20 percent in many cases – Mr. Murgado managed to eke out a modest earnings increase of 2.6 percent and keep staff numbers steady at around 100.
This year his revenue is jumping off the charts: January up 31 percent; February up 17 percent; March up 375 percent. "We've gained market share," he says, adding that the trend continued into April with a jump of 82 percent.
It's the same story elsewhere. Mr. Palacios says in the first four months of this year he has seen double-digit increases throughout his operation, including the sale of new Chevrolets and Cadillacs, compared with last year.
Mike Shaw, president of Mike Shaw Automotive, which includes dealerships in Denver and Colorado Springs selling Chevy, Buick and GMC, thinks full year revenue for 2010 could be 15 to 20 percent ahead of last year.
Mr. Shaw, who owns six dealerships across the country, reckons those figures could be higher but for "an across-the-board shortage of inventory" from GM. "They haven't cranked it up and it's hurting our sales," he says. "We're all missing sales."
Hot Sales and Production
Those shortages partly reflect GM's burgeoning recovery strategy for tighter inventory control. Company spokesman Mr. Henderson says sales are up for each of the last seven months and jumped 31 percent for the first four months of this year.
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