May 15, 2009 11:37 pm US/Eastern
Lansdale Dealership On GM Chopping Block
HATFIELD TOWNSHIP, Pa. (CBS 3) ―
J.L. Freed and Sons has been in Lansdale since 1883, selling farm tractors before cars were even on the road.
By the turn of the last century, Freed switched to automobiles. It started selling Cadillacs in 1926. Pontiacs followed just five years later.
But now, after 83 years, the longest chapter in this company's history may come to a close late next year.
General Motors officially notified J.L. Freed's owner Friday morning that the auto giant is terminating their relationship. Freed Pontiac-Cadillac will likely become a casualty of the worst economic crisis since this dealership started Pontiacs.
"It's disappointing," said Freed's owner Don Franks. "Evaluating the market, evaluating our performance, they simply said they did not see a productive relationship between General Motors and J.L. Freed."
J.L. Freed is by no means alone. GM told nearly 1,100 dealers the same thing Friday: your franchise agreement will not be renewed when it expires; our relationship is over.
Because GM is not in bankruptcy, dealers will have until late next year to wind down their business.
Chrysler, a company in bankruptcy proceedings, notified 789 dealers Thursday, including two dozen in the Greater Philadelphia area that they will also have to close, but they only have three weeks to do so.
"They're [GM] coming at this in a systematic, civil way," said Franks. "That's opposed to what Chrysler did, which is basically cut the dealers off at their knees. We may not like the message, but clearly something has to be done."
Unlike Chrysler, GM also is not required to provide a full list of the dealers it plans to cut. During a midday conference call, the company said it chose dealers based on volume, sales performance, customer satisfaction and location.
CBS 3 called local dealers Friday and learned that Videon Chevrolet in Newtown Square, Pa. was also on the list to be closed. Several other dealers chose not to comment.
"They've given us a couple of weeks to get back to them with something that may change their mind," said Franks at J.L. Freed. "They've left it open."
He has not yet decided what to do.
GM is eliminating the Pontiac brand completely, so that part of his business is over. But Franks could fight to keep his Cadillac dealership intact.
The good news for J.L. Freed's employees, this company also started selling a little known car line 40 years ago: Honda.
Honda sales now account for nearly 90 percent of the business here, so Franks expects there will be few, if any layoffs.
"I've got good people, and that goes a long way toward protecting your well being," he said. "We will survive."
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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