Still in the game
Gee Automotive looks forward after surviving nationwide cuts
Tuesday was a good day for Ryan Gee.
The chief executive officer of Gee Automotive Companies received definitive notice from General Motors that Gee would remain one of the reorganized corporation’s Buick, GMC and Cadillac dealers. GM filed bankruptcy Monday.
Gee and 152 other Hummer dealers in the United States also found out Sichuan Tengzhong Heavy Industrial Machinery Co. of China would buy the brand, one of three GM is spinning off to cut costs and raise capital. Sales of Saab and Saturn are pending.
Hummer’s fate had been unknown for months. The future of Pontiac, another brand sold by Gee, already was sealed. GM announced in April production would be discontinued in 2010.
Gee said some information about pending developments at GM have leaked out, but for the most part he has relied on media reports for the latest news. The tight lips were understandable given the fluidity of the negotiations that led to GM’s bankruptcy, he said.
“We try to be patient,” said Gee, who adds he has focused on communicating with his 139 employees during an automotive industry downturn unprecedented in the post-WWII era.
Gee Automotive encompasses the Hummer, Porsche and GMC-Buick-Pontiac dealerships in Liberty Lake, George Gee Cadillac-Kia in Coeur d’Alene, and George Gee Nissan in Pasco. Total investment, not including inventory, is well over $10 million, Gee said.
He said new, well-kept facilities likely weighed in GM’s decision to spare Gee the ax swung at 1,100 other U.S. dealers. Market share, high customer satisfaction and adequate capital probably helped as well, he said.
“We felt pretty good about our business,” said Gee, 34, who has been involved full-time since 1998 in a business that father George Gee originated in 1983 with a single Pontiac dealership. He took the reins five years ago, although the senior Gee still comes in most days, Ryan said.
“We have a close personal and professional relationship,” he said.
Gee said demise of the Pontiac brand will be a sentimental loss because of the family history, but only incidental economically. Pontiacs lost the performance cache that had differentiated the brand from other GM makes, he said.
Although new Hummer sales have been hard-hit because of high cost and low gas mileage, used Hummers have been his best-selling used vehicle. The dealership sold out this winter, Gee said.
The used car business in general has helped sustain the dealership, he said, estimating volume has increased 35 percent over 2008.
Five years ago, Gee said, new and used car sales were about equal. The ratio today is three or four used for every one new, he said.
“What may have been a new car buyer is a used car buyer,” Gee said.
And, he adds, used car sales are more profitable.
Gee said the dealerships are trying to stock up. A list of used vehicles he would like to have on the lot is posted across from the small café where customers can get a snack while they wait for mechanics to finish working on their cars.
Last week, the list included GMC’s Acadia, Yukon, Denali and Envoy models, as well as H2 and H3 Hummers.
The waiting area in the GMC/Buick/Pontiac dealership also offers Wi-Fi, workstations, a television lounge and small putting green – amenities that helped compensate for its relative isolation when it opened in July 2000. Gee added Hummer at the outpost in December 2005, and Porsche in June 2006. The Mercedes-Benz of Spokane and Spokane Kia dealerships bracket Gee’s three showrooms.
The soon-to-be GMC-Buick store is Gee’s headquarters. Accounting and other administrative functions are upstairs, and the 44-bay service area handles repairs for next-door Hummer.
Gee said employment has remained fairly steady during the downturn. Because salespeople and mechanics work on commission, he said, “We’ve seen a little bit of attrition.”
He said no Spokane dealers have so far been marked for closure because the community is not “over-dealered.”
Most of the cuts will take place in East Coast and Midwest markets where multiple dealerships in place for decades are cannibalizing each other’s sales, Gee said. Price-cutting not only squeezes the dealers, he said, but the affected brands lose value.
Relative newcomers like Toyota and Honda do not have that problem, he said.
Gee said he called his employees together Tuesday afternoon to announce the day’s developments. “There was a collective sigh or relief,” he said, as well as a sense of pride that Gee had been among the chosen.
Although working with a bankrupt company has presented some challenges, he said, the reorganized company will be able to deliver high-quality vehicles at lower cost.
“We’re pretty bullish about the future of General Motors,” Gee said.