"The guy says to the bank, 'I'll write you a check right now for the whole four years of the lease,' but the bank still said no," says a frustrated Jackson. His Fort Lauderdale company — the largest auto retailer nationwide — operates as AutoWay in a Tampa Bay market that's been especially hard hit by weak sales. "Banks are looking for every excuse in the world to say no."
Anecdotes — some might call them eulogies — like this one from stressing car dealers and auto executives are the coin of the gloomy auto realm these days. As someone roaming used car lots looking for a deal this past month, I can vouch firsthand: It's very quiet out there.
Last month's sudden shutdown of the so-called "Mr. Big Volume" Bill Heard Enterprises caught a lot of industry folks off-guard. The Chapter 11 bankruptcy of one of the nation's largest Chevrolet dealers with 14 Chevy dealerships, including one in Plant City, sent a shiver through many auto dealers. The economic ice of making and selling vehicles just keeps getting thinner.
About 3,200 people were put out of work when the Heard dealerships, which at their peak generated $2.5-billion in revenue, closed. And used-car dealer CarMax last week added to the nervousness when it said weak demand was forcing it to trim 600 workers at its 99 locations, including 25 job cuts at its Tampa and Clearwater locations.
It's just the start. "An increasing number of dealers are simply closing their doors because sales have plummeted, credit has dried up, the overall retail environment is increasingly challenging and potential investors are sitting on the sidelines," said Paul Melville, a partner at Grant Thornton LLP.