Two Las Vegas auto dealerships abruptly closed Wednesday, and company officials said the businesses were victims of a slumping national economy.
Georgia-based Bill Heard Enterprises closed 13 dealerships nationwide, including its two local outlets, Bill Heard Chevrolet on Decatur Boulevard and Vista Chevrolet on Drexel Road.
How many local workers were affected by the shutdown was unclear. The company employed about 2,700 nationally. Phone calls to the dealerships went unanswered. Phone calls to the company’s corporate offices were not returned.
Michael Lafricain, a sales representative at Vista Chevrolet, said he and about 70 other workers were told Wednesday morning the dealership was closing. He said the manager told the workers, "I lost my job, too."
Lafricain said the workers were told there would be "no compensation," but they would receive their final paychecks in two or three weeks.
"I had sales appointments coming in today," said Lafricain, who had been employed at the dealership for about three weeks. "This was completely out of the blue."
Bill Heard operated Chevrolet dealerships in Georgia, Florida, Alabama, Tennessee and Texas, as well as Las Vegas.
According to The Associated Press, phone calls to several Bill Heard dealerships Wednesday went unanswered. One employee at a Bill Heard dealership in Memphis, Tenn., said, "We’re closing, that’s all I can tell you." At another Bill Heard dealership, commotion could be heard in the background as a worker said managers would not come to the phone.
In a statement that was picked up by several media outlets, Bill Heard Enterprises blamed the economic climate for the closings.
"Rising fuel prices, a product portfolio of mostly heavy trucks and sport utility vehicles, economic recession, unfavorable local market conditions for vehicle sales, the crisis in the banking and financing sectors, and other factors all combined to create a business environment in which the company simply did not have the resources needed to continue to operate,” according to the statement.
The difficult sales environment was made worse by the banking and financial crisis, the statement said. GMAC Financial Services last month discontinued credit for new inventory for some of the company’s dealerships.
According to several automotive industry Web sites, Bill Heard was the country’s 11th largest dealership in 2007 with $2.13 billion in total revenue. The company had been the seventh-largest dealership six years ago.
The company began in Columbus, Ga., in 1919, founded by W.T. Heard Sr. It developed into the country’s biggest Chevrolet dealership and now is operated by his son, 74-year-old Bill Heard Jr. He was quoted earlier this year as saying he wanted to sell some of his dealerships.
According to an Atlanta television station, a Georgia watchdog agency in August alleged Bill Heard Enterprises participated in deceptive and misleading business practices. The company denied the allegations, which were made by the Governor’s Office of Consumer Affairs.
According to the Orlando Sentinel, in November 2007, Florida slapped Bill Heard Chevrolet with nearly 30 compliance orders and $400,000 in fees and other costs to settle an investigation into allegations of deceptive trade practices. The inquiry was prompted by consumer allegations accusing Heard of misleading sales, finance and advertising tactics.
Susan Garontakos, a spokeswoman for General Motors, which owns the Chevrolet brand, told Dow Jones News Service that Heard was "an independent businessman and has the right to go ahead" and close his dealerships. She said the operation was the single largest chain of Chevrolet dealerships in the country.
She said General Motors determines whether an auto dealership is still a viable sales location. If it is, the automaker will work to keep it open by consolidating it into other stores or by finding a buyer.
Three Chevrolet dealerships remain in Las Vegas: Findlay Automotive, Fairway Chevrolet and Henderson Chevrolet. Garontakos said GM will honor all Chevrolet warranties at other dealerships.
Cliff Findlay, president of the Findlay Automotive Group, said the problems leading to the closure of the Bill Heard dealerships were with that company and not the Chevrolet or General Motors’ products. He said the economy is hurting all businesses including car dealers.
"People are not doing anything to their vehicles, and that’s going to create bigger problems," Findlay said. "There is a fear factor right now, and people are holding back."
Terry Hoisington, general manager of the Fairway dealerships, said there has been a slowdown in auto sales across the board, not just domestic vehicles. He said the closing of Bill Heard dealerships should not concern consumers interested in Chevrolet products.
The Associated Press contributed to this report. Contact reporter Howard Stutz at firstname.lastname@example.org or 702-477-3871.PROBLEMS POSSIBLE The closing of Bill Heard’s local dealerships could cause some problems for local customers. One issue might be consumers who had automobiles being serviced at Vista Chevrolet or Bill Heard Chevrolet and how the customers can pick up their vehicles. Michael Lafricain, a sales representative at Vista Chevrolet, said he saw between 20 and 30 vehicles in the service department when the dealership closed. Bill Heard representatives assured the Nevada Department of Motor Vehicles on Wednesday that they will keep skeleton crews at the dealerships offices to handle unresolved matters, such as pending auto sales, DMV spokesman Kevin Malone said. Under Nevada law, dealers have 15 days to find financing for car buyers and to provide the Dealer’s Report of Sale so the buyer can get car license plates. If financing cannot be obtained, the dealer can rescind the sale and must return the buyer’s down payment and trade-in vehicle, Malone said. The buyer has 30 days to file papers with the DMV for a title. "The first thing you do is to make sure you keep all your paperwork," Malone said. "Hopefully, they will complete all of these sales." Dealerships are required to keep records on auto sales on file for three years. Buyers needing to obtain information should contact the DMV, he said. The auto dealer has not surrendered its DMV business license, Malone said. Any GM dealership will honor Chevrolet warranties. The state Consumer Affairs Division had not received any complaints about the dealerships’ closing Wednesday afternoon, spokeswoman Elisabeth Shurtleff said. JOHN EDWARDS / REVIEW-JOURNAL