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Trying to Give the Big 3 a Lift

September 20, 2006|Molly Hennessy-Fiske | Times Staff Writer

WASHINGTON — As Vice President Dick Cheney credited American auto dealers with contributing to a booming economy Tuesday, many of them worried about their industry's uncertain future.

Speaking at a conference of the National Automobile Dealers Assn. about a week after President Bush postponed a meeting with the nation's Big Three automakers, Cheney trumpeted the economic expansion of the last four years and disarmed dealers with stories of his 1949 Chevrolet.

"It had a lot of power," Cheney joked. "As I recall, I could pretty much pass anything on the road except the filling station."

Chevrolet maker General Motors Corp. and the rest of the Michigan-based Big Three have been reeling under the weight of rising pension and healthcare costs while seeing sales of their most profitable models -- big pickup trucks and sport utility vehicles -- sag in a time of persistently high gasoline prices.

After Bush called off a scheduled meeting with Big Three executives in May, he fielded complaints of a crisis in auto manufacturing from Michigan Democrats and Republicans alike, including GOP Senate candidate Michael Bouchard and gubernatorial candidate Dick DeVos. The meeting was rescheduled this month for after the midterm elections.

On Tuesday, many dealers said they felt stung by an economy that has auto manufacturers cutting back and sales falling in response to gas prices that are only now starting to moderate.

"I couldn't agree with everything he said," dealer John Symes of Pasadena said after hearing Cheney's address.

"The car business is pretty uncertain right now," said Symes, whose dealerships sell both domestic brands, such as GM's Cadillac, and foreign marques, including Toyota Motor Corp.'s Toyota and Scion. "There's so much overcapacity in the world to buy cars -- there's too many manufacturers, too many dealers. The moment the economy weakens, somebody is going to suffer."

U.S. auto sales through August were down 4.3% from a year earlier, with the Big Three falling 10.9%, according to Autodata Corp. Sales of Asia-based and European brands rose 4.9% and 4.5%, respectively, in that period.

Many cars and trucks sold last year by the domestic manufacturers came with incentives that have since been scaled back, hurting sales, dealers said.

Bill Willis, a Chevrolet dealer from Smyrna, Del., said he was struggling to sell American-made cars to customers who knew that foreign-based brands such as Toyota were now made in the U.S. too. He said the auto industry had to do a better job of educating potential buyers about the growing trade deficit and how much foreign businesses profit from their spending.

"We have to tell them, follow the dollar -- where does it go, here or Japan?" he said.

On Tuesday, Cheney said the administration hoped to help auto dealers remain competitive by pursuing legislation to extend tax cuts, repeal the estate tax and return more money to consumers.

George Nahas, a dealer from Tavares, Fla., said there was little the administration could do to help the ailing auto industry.

"We're a manufacturing industry and a marketing industry," he said, "and I think we need to solve our own problems and not turn to government."

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molly.hennessy-fiske@latimes.com

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