Dealers Under Financial Pressure, Slash Workforce Across the US

Even if the United States government agreed to help the struggling domestic automakers GM and Chrysler, problems are far from being over in the country. Despite the companies' efforts to preserve jobs, more than 50,000 people lost their jobs in 2008, after dealerships saw their profits simply devastated by the global economic downturn. The collapse began in September, Autonews wrote, almost at the same time with the financial crisis that pushed automakers close to bankruptcy. Unfortunately, losses keep coming and dealerships may be forced to cut more jobs in the near future.

Just to emphasize the difficult times US dealerships currently experience, Galpin Ford, an authorized Ford dealership, said approximately 62 workers were laid off in December. This was the first job cut since the dealer opened its doors in 1946, owner Bert Boeckmann was quoted as saying by Autonews.

"I've got a lot of longtime employees. It was a painful experience for all of us. We're not making any money at all. We're set up to do large volume, and we're just not doing it,” he said.

In addition, Fritz Hitchcock, owner of a Los Angeles dealership that sells BMW and Toyota models through several stores, said he fired approximately 225 employees in about one year.

"They come across the board. Sales management, salespeople, office and support people, service writers, parts department employees and, in some cases, technicians,” Hitchcock said. "I anticipate more layoffs, anywhere from 10 to 15 percent. We will make some more in the sales department probably next week. You can't carry extra weight. We are asking people to be a little more productive."

But even so, dealership owners admit that cutting jobs isn't the proper answer to the economic crisis. Stacey Gillman Wimbish, president of Gillman Cos., which owns 14 stores in Houston, explained dealers have to cut some jobs to meet market demand and then concentrate on revamping sales. "You can only cut so much until you hit muscle. You've got to have one-time cuts that hurt, then you've got to go back to focusing on growth,” she said.