Gee Automotive Responds to GM Announcement

LIBERTY LAKE, Wash.--(BUSINESS WIRE)--GM announced today that it would file for Chapter 11 bankruptcy protection, allowing it to reorganize operations while continuing to produce the vehicles it has since the company formed in 1908. Equity ownership of GM will be dispersed among the current shareholders, bondholders, the U.S. government, and other stakeholders. The goal of the company’s plan is to restore the health of some of America’s most beloved automobile brands by streamlining operations and building a foundation that will sustain GM long into the future. Full details of the company’s plan can be found in a press release issued early this morning.

Ryan Gee is president and CEO of Gee Automotive Companies, which operates new and used car dealerships in Eastern Washington and Northern Idaho and deals GM makes including Buick, Pontiac, GMC, Hummer, and Cadillac. The company was founded in 1983 by Ryan’s father, George Gee. It has been fielding dozens of calls per day inquiring about the fate of its stores in the wake of GM’s viability plan, announced April 27, and anticipates many more in light of today’s announcement of a New GM.

“While the U.S. auto industry undergoes a radical transformation unlike anything in its history, the good news is that George Gee stores march on and, as of this morning, franchise agreements for all of our stores remain in place,” said Ryan Gee. “With interest rates at all time lows and credit markets loosening, conditions are as favorable as ever to finance a new car.”

As part of the company’s restructuring plan, GM announced they were terminating franchise agreements with 1,100 dealerships. This news has led to confusion on the part of Gee’s customers who want to know the fate of George Gee stores. GM has notified most of its dealership partners of their fate and none of Gee Automotive’s locations have been exposed in the reorganization thus far.

“This is about right-sizing GM for today’s market and we are confident that, as a long-time partner in this region, we have the market share, the customer service and the community roots to be around for a long time,” added Gee. “This contraction is something that was needed. It happens to have come to a head during a very difficult economic time in the U.S., but it helps those of us who will continue to operate by increasing throughput at each GM dealership, and opening up new opportunities that would not otherwise exist.”

“We feel deep sympathy for the dealerships with whom GM will not continue its franchise relationships,” adds Gee. “The automotive industry is extremely close-knit and we have stood together alongside our colleagues through many ups and downs. This is the most challenging time that many of these companies could face in their professional lives and our thoughts are with them.”

The Present and Future

An auto dealership like Gee Automotive is typically a five-pronged business model encompassing new car sales, used car sales, parts, service and financing. Gee offers the following summary of the company’s business lines:

• New car sales have slowed and that is a reality of the current economy, but the incentives for purchasing a new car have never be better
• Warranties on all GM automobiles remain in place and are being backed by the U.S. government and others
• Trade-in value is also at a high on used cars because they are selling in high volume in the current economic environment
• Used car sales have been an attractive alternative for our customers and we have posted record volume months for used cars in 2009
• In the same vein as used car sales, parts and service have been operating at a healthy clip while our customers seek to repair cars they have now, and wait out the economy to make new purchases
• Financing for qualified customers has never been more favorable

“The bottom line is that dealerships are the source from which 90 percent of GM revenues are created,” Gee added. “We have been a profitable contributor to those revenues throughout three decades. We stand by them during this time and we stand by the community that we serve.”

About Gee Automotive Companies

George Gee founded his first auto dealership in Spokane, Washington in 1983. Today, Gee Automotive Companies had grown to consist of new and used car dealerships located in Pasco, Washington and Coeur d'Alene, Idaho, with a 68,000 square foot flagship location in Liberty Lake, Washington at 21502 E. Mission, sits on 7.5 acres of land and includes a 44-bay service department. Gee dealerships carry Buick, Pontiac, GMC, Hummer, Porsche, Nissan, Cadillac, Kia, throughout Eastern Washington and Northern Idaho. The company has 139 employees and is locally owned and operated.

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