Big Isle loses GM dealers


POSTED: Thursday, May 21, 2009

Island Chevrolet has closed its Hilo and Kona dealerships on the Big Island, but not because it received a termination letter from General Motors.

“;Everybody assumes that I got the letter. I didn't get a letter,”; said Alan Clark, president of Clark Automotive Group Inc., the dealerships' parent company.

The timing coincided, but Clark would have been closing anyway due to financial difficulties.

“;I can't get a loan for a flooring line,”; he said, referring to financing from General Motors Acceptance Corp., or another lender, to buy cars to put on the sales floor.

Prior to his financing difficulties, the credit crunch, high gas prices and increasing unemployment sapped sales.

Clark had a buyer lined up who had “;wanted to see what GM was going to do in the bankruptcy ... but when GM and GMAC wanted a binding buy-sell agreement by May 15,”; the potential deal fell through, he said.

“;I've tried everything I could to get an investor in here; it's like foreclosure,”; he said.

The dealerships have closed and their service departments were finishing up their last repairs yesterday. When the mechanics' bays closed for the last time, General Motors' government-backed warranties became worthless for Big Island owners of GM vehicles.

Other dealers have stepped up, Clark said, “;but GM hasn't taken them up on it,”; leaving the Big Island with no options for covered service.

“;That's the big $64,000 question. I've been asking them that question for the last week,”; but he has not heard back from GM, Clark said.

A GM representative could not be reached.

Clark notified the state Department of Labor and Industrial Relations that his 32 employees would lose their jobs and “;they came out and talked to everybody last week,”; he said.