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Berlin City staying strong despite industry turmoil

May 13, 2009
GORHAM — General Motors may be shedding brands wavering near bankruptcy, and Chrysler may have already declared bankruptcy, but it's had little effect on the Berlin City family of dealerships in Gorham, according to the general managers of Berlin City Ford and Berlin City GM.

"We actually do well in a downturned market," said Ed Watson, general manager of Berlin City GM. He said his sales since Jan. 1 are up 15 percent over the same time last year.

Berlin City Ford General Manager Shawn Hanlon said his sales were up 23 percent from February to March.

Both managers said the manufacturers' problems had effected their sales, but not drastically.

"Chrysler has the least impact of all the lines we carry," Mr. Hanlon said. "Were it Toyota, it'd be a different story."

Berlin City Ford sells Chrysler, Honda, Nissan and Toyota vehicles, in addition to Fords. Mr. Hanlon said it's too soon to know what the bankruptcy will mean for his Chrysler sales, but he doesn't see it as a threat to the dealership.

It is the same feeling down the street at the GM store.

"This store felt more impact last summer from high gas prices," Mr. Watson said. He said trucks are what his dealership sells the most of, and lower gas prices have helped sales. "Once gas prices fell in September we started to pick up the pace," he said.

"The biggest challenge is that the customer isn't as confident in Chrysler," Mr. Hanlon said, but his dealership isn't about to stop carrying the brand. He said he is hopeful a deal between Italian automaker Fiat and Chrysler will go through, and Berlin City Ford will get the opportunity to sell Fiats.

Mr. Hanlon said December and January were "tough," but he doesn't put much of the blame on the industry. He said those months are traditionally slow months for dealerships, but the economic downturn made this year noticeably worse.

And the last 60 days have been much stronger, he said, despite Chrysler's troubles.

GM's troubles, meanwhile, may have been rough on some dealerships, but Mr. Watson said it has been relatively good for his. He said Berlin City GM's prices compare favorably to dealerships regionally, and in good economic times people are willing to pay a bit more not to have to travel when buying a new car. As the economy weakens, he said, people start traveling further and further from home in search of lower prices. Mr. Watson said this has helped his sales increase despite the downturn.

The same rules don't apply at Berlin City Ford. Mr. Hanlon said his sales suffered as the economy worsened, partly because the dealer networks of Ford, Toyota and Honda are stronger than that of GM. Mr. Hanlon ran Berlin City GM for 14 years before moving over to Berlin City Ford, and he said lots of smaller GM dealerships have failed as a result of the downturn, pushing their customers to Berlin City GM. The same isn't true for Toyota and Honda dealers, he said; these brands' dealerships have had the strength to weather the downturn.

Even fewer GM dealerships will exist in the future. Around 1,200 dealerships will be culled by GM, starting May 11, Mr. Watson said, and in total 2,600 dealerships will close by 2010. Most of the closures will be small, underperforming dealerships, he said, but Berlin City GM is secure.

Still, work as on the sales floor isn't what it was in good economic times. Ted Dorr is a salesman at Berlin City GM. He said business has slowed, and he doesn't make as much as he used to. But, he said, business isn't bad. He said he doesn't worry about his job, and he knows his dealership is doing better than many others.

Some Berlin City Ford employees, however, haven't had secure jobs. Mr. Hanlon said his dealership had to lay off employees to cut costs several months ago. He was unable to give specific numbers of how many people were laid off, but he said there had been cuts. These days, however, as sales pick up, Berlin City Ford is hiring again.

Mr. Watson's Berlin City GM, meanwhile, dodged three bullets, even though it was hit by one. GM is discontinuing four brands: Hummer, Pontiac, Saab and Saturn. Of those, Berlin City GM only sells Pontiac. Mr. Watson said that when Hummer first came out GM saw it as a niche brand. They put Hummer in one dealership per state, and they made sure that dealership was in an urban market. He wanted Hummer back then, he said, but now he's glad he doesn't have it. He said he's also happy to be without Saab or Saturn.

Pontiacs will continue to be built until 2010, and Mr. Watson said he'll continue to sell them until they are discontinued. GM may still declare bankruptcy, but like Chrysler, that does not mean they will stop making cars. With federal government backstopping for the auto companies, Mr. Watson pointed out, there is no reason to be concerned about warranty issues. He said GM is still doing well for Berlin City.

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