Taking Stock
General Motors dealers in Southern California are growing increasingly fearful that the bitter strikes crippling the nation’s largest auto maker may soon result in shortages of autos and parts.
While many dealers generally say they have enough inventory for now, the continuation of the strikes into July could change that.
“It’s had no effect on us whatsoever,” said Jeff Sammet, general manager of Century Van Nuys GM Supercenter, one of the region’s largest GM dealerships. “That’s not to say that somewhere down the line we won’t be in trouble if things continue the way they are.”
Meanwhile, a small number of dealers say they are already starting to suffer some shortages of cars and parts.
“We’re running short and we’re having trouble getting cars,” said Frank Zicker, fleet manager for La Brea Chevrolet/Buick/Oldsmobile in Miracle Mile. Zicker said he has 105 vehicles, half the inventory he normally has. Already missing from the lot, he said, are the popular GMC Tahoe trucks, and only three of the equally sought-after GMC Suburbans remain.
Baldwin Lopez, parts manager at Don Steves Chevrolet in La Habra, said the walkouts are reducing the supply of replacement parts used in crash repairs. That is understandable because the strikes affect two plants that make GM parts.
“We usually get sheet metal orders filled overnight,” Lopez said. “But all of a sudden we’re being put on indefinite delay for some of the fenders and other parts we’ve ordered.”
GM and the auto workers union have been locked in a pitched battle for two weeks over UAW’s fears that the company’s push to modernize older plants will lead to layoffs. In protest, the union has launched strikes at two GM plants, idling 105,500 workers and shutting down more than 90% of GM’s assembly operations.
Dealers these days, however, typically carry on their lots a two- to three-week supply of vehicles replenished periodically by replacement stock from regional distribution centers. The pipeline from factory to distribution center to dealership usually has a 45- to 60-day supply of cars and trucks in it, so for many, the strikes’ repercussions are still a way off.
“I told my staff this morning that there’s no impact yet,” said Don Partch, general manager of Nabers Cadillac-Oldsmobile in Costa Mesa. “We were in good shape with our inventory when the strike started, and we’re still getting deliveries from Cadillac’s central distribution center, so I think we’ll stay in good shape for a few more weeks.”
Sammet agrees. With an inventory of roughly 400 vehicles covering all GM lines but Cadillac, he said he has enough stock to last up to two months. “I don’t think there’s any need to panic,” he said. “When we run out of cars, we’ll worry about it.”
The strikes have even been a boon for some.
Dealer Trey Selman of Selman Chevrolet in Orange said the walkouts have actually boosted short-run sales of several GM lines as buyers move up purchase decisions to avoid potential shortages in inventory. Among the most popular buys, Selman said, have been Tahoes and Suburbans.
GM sales in general have been up since April given the auto maker’s efforts to boost market share through rebates and other promotions.
John Nieman, general manager of City Chevrolet-Volkswagen in San Diego, said one impact of the strikes is likely to be the quick disappearance of hefty rebates. As supply dwindles, there will be little need for manufacturers to entice buyers with incentives that are averaging $1,500 a vehicle now.
Nieman’s dealership has a three- to four-month supply of new cars and trucks, which should be sufficient to ride out the dispute.
But the dealership is hedging its bets by increasing inventories of late-model used cars. This would provide the dealership an alternative source of revenue if it exhausts its new-car inventory.
Weeks before the strikes, the sales push prompted Sonny Kapur, general manager of Bay Buick GMC in Torrance, to buy extra stock in anticipation of a summer sales rush. It appears Kapur’s foresight has already paid off, albeit for a different reason.
“I’m glad I did it,” Kapur said. “Otherwise I would be in the same boat as some of the other dealers.”
La Brea dealer Zicker, for example, said some of his customers are being inconvenienced by his shortage of hot-selling models.
Three customers, in fact, have completed deals to buy new Tahoe trucks and are now waiting for delivery of their vehicles. “They’re understandably not very happy,” Zicker said. “But no orders are being filled right now.” This week alone, the dealer said, he had to turn away six customers looking for Tahoes.
Zicker fears both GM and the union have settled in for a long fight and at the earliest, the dispute is still at least a month away from resolution. “It’s going to get worse before its gets better,” he said.
With that prognosis, he has already begun to worry about his 14-person sales team. With fewer cars on the lot, Zicker said, his staff will have fewer and fewer chances to make commissions as the strikes persist. The dealership has no layoff plans, Zicker said, but word has already spread along the sales floor to prepare for hard times.
“We’re still a couple weeks away,” he said, “but they’re going to have to find other sources of income.”
Lopez of Don Steves Chevrolet said he believes the parts shortages are spotty and that so far they affect only body panels. The supply of maintenance and engine repair parts, Lopez said, is rarely interrupted by a strikes. “There is a lot of depth in the supply chain for those things,” he said.
Times staff writer Donald W. Nauss in Detroit contributed to this report.
