One of NCT’s most valued customers recently came out in support of the plan announced by GM to close many dealerships across the country. In a press release, AutoNation Chairman and CEO Mike Jackson called the dealership consolidation plan by GM a “difficult but positive step that will strengthen America’s dealer network and improve dealer profitability over the long term.”
From the press release detailing AutoNation’s support for GM’s dealership consolidation plan:
AutoNation, Inc., America’s largest automotive retailer, today announced that General Motors notified AutoNation that six of its dealerships were identified for potential closing by GM. The notification is part of GM’s communication today to approximately 1,100 dealers that GM does not expect to continue as GM dealerships past October 2010. The AutoNation stores potentially impacted by the consolidation plan represent 0% of AutoNation’s 2008 operating income. AutoNation does not believe that any one-time charges that may be associated with these actions will be material to its continuing operations or debt covenants.
Todd Sullivan, a value investor who looks for investments he believes are selling for a discount to their intrinsic value given their current situation and future prospects, believes that the GM dealership consolidations will actually be helpful for AutoNation:
I have been saying for a while now this would be helpful for AutoNation (AN) in allowing for it to expedite its domestic reduction plans. What remains to be seen is what is happening around them. 1100 GE dealers closed by the end of 2010, mostly in metro areas leaves a lot of competition be be shuttered.
AutoNation is not disclosing the names and locations of the dealerships scheduled to be closed. GM has roughly 75 South Florida dealerships.
Tags: autonation inc, florida dealerships, gm dealership, gm dealerships