Closed dealerships to affect Chicago area

May 15, 2009 (CHICAGO) The auto manufacturer notified about 1,100 dealers Friday that their franchises will be terminated next year.

The company will not reveal publicly which dealerships will close, but at least two dealerships in the Chicago area have said they received letters from GM informing them of the company's action.

The moves are expected to cause the loss of thousands of jobs across the country, and the news is devastating to the communities where the dealerships are located. Many of those businesses generate a lot of tax revenue and support community-based programs.

But GM defended the cuts on Friday, saying there are too many dealerships and some need to close by the end of next year. One of them is in Chicago's Roseland neighborhood.

Roseland Pontiac is closed for the day. The gate is locked. The building is empty. And business as a GM dealership is over.

"It wasn't a big shock. We knew the writing was on the wall from what we heard," said Jerry Zegley, ower Roseland Pontiac.

A few weeks ago, Jerry Zegley heard that GM discontinued the Pontiac line, the only cars they sell. Zegley's family has owned this business for 98 years and have sold Pontiacs for the last 76. It's the last car dealership in the far South Side neighborhood, where boarded buildings and chained gates line the streets.

"Roseland is trying to make a turnabout but like you said with these times and the economy, it's going to be pretty hard," said Marsha Johnson, Roseland resident.

That ripple effect is evident in west suburban Westmont, where car dealers are the biggest business. None have closed, but car sales tax revenue is down 11 percent. So the town has cut seven jobs and there will be no flower baskets this year.

"The elected officials said, 'hey, if we're laying folks off, we think hanging flower baskets is an amenity we can put on hold for this year,'" said Westmont Economic Development Director Fred Kimble.

And even though GM plans to cut 40 percent of its dealers by the end of next year Friday's news is not grim for everyone.

Like Desmond Roberts of Advantage Chevrolet in west suburban Hodgkins. They did not receive a letter.

"We thought, 'hallelujah! We're safe...our business can continue," said Desmond Roberts, president, Advantage Chevrolet.

In Roseland, Jerry Zegley says business will continue. They still have a service center, which will be open as usual. And instead of Pontiacs, they want to see used cars of every kind.

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