What GM's bankruptcy means to you

Published June 1, 2009 6:27 pm

Warranties » One dealer says customers are in a more secure position.
This is an archived article that was published on sltrib.com in 2009, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

General Motors Corp. may be in Chapter 11 but the automaker isn't going out of business anytime soon. It will continue to make vehicles and its remaining dealers will continue to service and sell cars and trucks.

"The silver lining to this bankruptcy cloud hanging over General Motors is that they have the government firmly behind them," said Stephen Wade, a St. George dealer who notes the billions of dollars being poured into the company "that means they're not about to just walk away from the company."

Yet that doesn't mean consumers shouldn't be concerned, given that GM is cutting ties with up to 2,600 dealers by 2010, including 200 more who will get letters today. Here are answers to some questions they are asking.

Are there downsides to buying a GM car?

Given that GM is moving forward with only four core brands -- Buick, Cadillac, Chevrolet and GMC -- buyers might worry about the ease of replacing parts and the resale value of brands with uncertain futures (Saturn, Saab and Hummer are for sale; Pontiac is being shut down). But parts generally are interchangeable, and Ken Christofferson, general manager of Gene Harvey Chevrolet in American Fork, "can't see any downside (to buying the core brands). GM isn't going anywhere. About the only thing people are going to have to get used to is the idea that GM will probably emerge from bankruptcy a much smaller company."

What about warranties?

Actually, when it comes to warranties, buyers are in a more secure position than they were in the past, Wade said. "They have not only GM backing their warranties but the federal government." President Barak Obama told Americans in March that if they buy a Chrysler or GM automobile, they will be able to get their car serviced and repaired as usual. "Your warranty will be safe. In fact, it will be safer than it has ever been because starting today, the United States will stand behind your warranty," he said.

What if my dealership goes out of business? Who can I get to service my car?

"There still will be plenty of GM dealers around," Wade said. "And any of them will be happy to do any warranty work (even if the car wasn't bought from them). During these tough times, a lot of dealers are depending on their warranty and repair work to help them by."

Will there be great deals on GM automobiles because of the bankruptcy?

Yes, there are plenty of deals out there and there will continue to be until the existing excess inventory is reduced and brought into line with demand, said Jerry Seiner of Jerry Seiner Chevrolet in Salt Lake City. "The deals at this point are so good that I bought a new car for my wife just two weeks ago," he said. Those interested in one of the cast-off brands might want to move in the next 60 days to get the exact model they want because production has shut down for the foreseeable future, Gary Dilts of J.D. Power and Associates told The Associated Press.

What is going to happen to Saturn, Saab and Hummer?

The three lines are being jettisoned as part of GM's plan to emerge from bankruptcy as a leaner, more competitive automaker.

GM has not yet confirmed buyers, although it said a deal for Hummer was imminent and one for Saturn should be announced within weeks. Given its rather targeted market, it's unclear whether the demand for Hummers will continue, but the Saab brand has a lower risk of being discontinued, Robert Wiseman of the Eli Broad College of Business at Michigan State University told The Associated Press.

The Associated Press contributed to this story



Reader comments on sltrib.com are the opinions of the writer, not The Salt Lake Tribune. We will delete comments containing obscenities, personal attacks and inappropriate or offensive remarks. Flagrant or repeat violators will be banned. If you see an objectionable comment, please alert us by clicking the arrow on the upper right side of the comment and selecting "Flag comment as inappropriate". If you've recently registered with Disqus or aren't seeing your comments immediately, you may need to verify your email address. To do so, visit disqus.com/account.
See more about comments here.
comments powered by Disqus