After a mighty fight, General Motors Corp. reversed itself and announced it will let Paul Walser keep his Bloomington Buick Pontiac GMC dealership open after all.
The news came Monday night after last week's lobbying blitz on Capitol Hill by Walser, other auto dealers and officials of the Minnesota Auto Dealers Association [MADA].
Walser and other dealers largely credited U.S. Sen. Amy Klobuchar, D-Minn., who they said demanded GM executives explain why they're willing to risk economic mayhem by shutting profitable dealerships in her state.
The bankrupt automaker said it would close several plants and terminate franchise agreements for 2,600 dealers (36 in Minnesota) in an effort to emerge from bankruptcy leaner and profitable. As is the case with Chrysler -- which today terminates 789 franchises, including 18 in Minnesota -- some of those targeted have been making money, despite the recession.
The 300 Chrysler dealers who appealed the automaker's decision lost their battle in federal court Tuesday, as a U.S. bankruptcy judge allowed Chrysler to close the franchises, effective immediately.
At GM, 500 dealers had appealed. Mark LaNeve, GM's vice president for North American sales, said Tuesday that GM has reversed its decision to shut 15 to 20 dealerships to date.
Walser, whose family of dealerships is one of the largest in Minnesota, was elated. "It is a thrill to have some good news here. The employees are just so thankful," he said.
MADA spokesman Scott Lambert said Walser is the only dealer in Minnesota so far to win a reprieve.
Family business
Walser got GM's phone call Monday night and called his father, who started the store in 1976, and his brother and partner, Andrew. Andrew Walser delighted in phoning the general manager, who has worked at the Bloomington store for 25 years.
The general manager "was absolutely emotionally distraught" when GM decided last month to shut down his store. "It was like his child," said Paul Walser, who praised Klobuchar's efforts.
Now Walser and other targeted dealers hope the phone will ring for others in the state.
"I fully expect to hear from them. I'm optimistic that way," said Scott Preusse, who got a double dose of bad news last month when Chrysler and GM told him they will terminate franchise agreements for his Redwood Falls, Minn., store.
Tuesday was the final day selling Chrysler cars for Preusse and 17 other Minnesota dealers. If GM doesn't reverse its decision, he will also have to shut down that part of his business in October 2010. While he plans to service vehicles and sell used cars at the site, he'll probably have to terminate some of his 24 employees, and his new-car customers will have to drive 30 to 40 miles to find the next GM dealer.
"It is not in GM's or Chrysler's best interest to close us down and have us walk away from our 5,000-customer base," Preusse said. "They made a mistake."
Other Minnesota dealers also hoping for a break include Koronis Motors Chevy and Buick store in Paynesville, Minn.; Nelson Chrysler Dodge GM in Fergus Falls; and George McGuire's Shakopee Chevrolet. All went to Washington to lobby Congress last week.
As a result, GM is making some concessions, said John McEleney, chairman of the National Auto Dealers Association.
"We believe GM has made a very good-faith effort, given the unprecedented circumstances facing GM and the industry," he said.
Dee DePass • 612-673-7725