Local reaction to GM overhaul generates fear, relief

A bump or a blowout?

Depends who you talk to.

Curtis Tipton isn't worried about General Motors' bankruptcy filing.

"The cars are here now and will be out for years to come, so it doesn't matter to me who goes out of business. I'm not picky about brands," Tipton said Monday, as he checked out a $36,000 Dodge Challenger R/T at Joe Ferguson Pontiac Buick GMC Truck.

Paul Parsons, however, said the federal government's takeover of 60 percent ownership in the new GM is "a little frightening."

"In the attempt to salvage this great corporation, they'll damage the market and the economy, and it may be difficult to back out. It makes me nervous," Parsons said Monday, taking a coffee break in downtown Colorado Springs.

Jerry Colten, owner and general manager of Al Serra Chevrolet-Volkswagen-Hummer, said he is relieved by GM's move to reorganize under Chapter 11 bankruptcy protection.

"We knew it was coming, and we want to get it over and done with and get GM's costs in line with the competitive Asian companies," Colten said. "I see it as a positive thing."

Detroit-based GM, once the world's largest automaker, is poised to receive an additional $30 billion in financial aid from the U.S. Treasury Department and $9.5 billion from Canada, on top of about $20 billion in taxpayer money it has already received through low-interest loans.

Colten said such backing is a vote of confidence.

"I don't think the federal government would give GM that kind of money if they were going to close or if they thought they'd lose it," he said.

What will go down in history as the largest industrial bankruptcy will put both the industry and its auto dealer network at grave risk, said Tim Jackson, president of the Colorado Automobile Dealers Association.

"It's a huge hit to the industry," he said.

GM last month sent about 1,100 franchise dealerships letters of intent to terminate their sales and service contracts. Of those, Jackson estimates 13 to 15 are in Colorado, including Daniels Chevyland in Colorado Springs. The state has 88 GM outlets.

Meanwhile, 14 of the state's 44 Chrysler dealerships have been notified that their agreements with the manufacturer, which filed for Chapter 11 bankruptcy protection April 30, will be terminated. Lithia Colorado Springs Jeep Chrysler is on the list of 789 targeted dealerships and will close June 9.

Each dealership in Colorado employs, on average, 60 to 80 people, Jackson said.

Daniels Chevyland owner Elizabeth Daniels said earlier that she planned to appeal GM's decision to end her contract. She could not be reached Monday. Jackson said GM's bankruptcy filing will make it more difficult for dealers to fight the automakers' intentions. Chrysler's dealers can appeal their terminations in bankruptcy court on Wednesday.

The number of dealers will be further reduced, Jackson said, as GM plans to shed about 500 dealerships that market Saturn, Hummer and Saab brands, which will be closed if the lines are not sold.