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Car dealer closings cut deep

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By MICHAEL SASSO

msasso@tampatrib.com

Published: November 15, 2009

TAMPA - Major golf tournaments such as the Transitions Championship at Innisbrook usually provide its 100-plus PGA golfers with a free vehicle for a week. The cars are split among local car dealerships after the tournament ends.

But with the recession raging, PGA players - like many Bay area residents - are going without.

At the spring tournament, like this year, Buick won't be offering some 120 cars to golfers. Tournament director Gerald Goodman hopes to find a new sponsor, but will rent cars for players if he can't find one, he said.

"Every one of them knew times were tight," Goodman said of the golfers. "They were willing to drive their own cars."

If it's a tough time for pro golfers, pity the tournaments, nonprofit groups and businesses that depend on car dealerships to help pay the bills. In this recession, at least 20 dealerships in the Bay area have closed or are scheduled to lock the doors because of slow sales or because General Motors or Chrysler withdrew their franchises.
Gross sales at Hillsborough County auto dealerships were $524.6 million in August 2007, before the recession took hold, according to the Florida Department of Revenue. Two years later, the county's auto sales had sunk to $305 million, a 42 percent decrease.

A ripple effect
The effects are rippling through the economy.

About 2,000 jobs have been lost, charities have fewer sponsors for their galas and advertising has plummeted.

At least one direct-mail company, American Marketing and Mailing Services - which counts 500 auto dealership clients nationwide - says the outlook is brightening and advertising is rebounding. But those most affected are still reeling:

• Workers: Jobs in the car business are so scarce that when Elder Ford of Tampa, the company that took over bankrupt Ernie Haire Ford, advertised for a new general manager, 600 people applied.

"Of those, 400 were qualified," marveled Rob Elder, president of Elder Automotive Group.

At the former St. Pete Chrysler Jeep on U.S. 19, things are eerily quiet in the main showroom, where owner William Douglas keeps an office. He has laid off half of his 50 employees since Chrysler pulled his two new-car franchises. He has renamed the dealership St. Pete Auto Mall and is making a go of it as a used car sales and service operation.

"It's weird," Douglas said of the vacant showroom. "I try not to stay here too much. I try to stay in the used operation next door."

Bay area dealerships employed 6,874 people in March 2007; they employed 4,830 in March this year, according to data provided by the Florida Agency for Workforce Innovation.

• Charities: Car dealerships are among the biggest sponsors of charity galas, fundraising drives and golf tournaments. Most major golf events, including the Transitions Championship, are run by nonprofit groups and support local charities, Goodman said.

In 2008, Roger Rivard, president of James-Rivard Buick-Pontiac-GMC, and his wife hosted the American Cancer Society Southeastern Hillsborough office's annual gala at the TPepin Hospitality Centre in Tampa. It's a huge fundraiser for the office and brought in $120,000 for the charity last year, said Dana Johnson, the office's executive director.

But with business so slow, Rivard said he had to cut back on his giving, pulling out of the 2009 event. The charity brought in $48,000 this year, Johnson said.

"That's the perfect example of one charity, one event, from one year to the next," Rivard said.

• Advertising: With sales so depressed, dealerships are turning their attention to their repair divisions to draw customers, said Fest, the American Marketing and Mailing Services executive.

Dealers used to take out 10 ads pitching cars for every one ad they took out advertising their service departments. Now, the split is about 50-50, Fest said. His Tampa-based business is down 27 percent this year, partly because of the car dealer slowdown, but he saw signs that advertising was bouncing back last month.

Ad spending cut

Other firms that rely on car ads are feeling the pinch, too.

During the first nine months of this year, auto dealers spent $9.2 million on spot TV ads in the Bay area, according to TNS Media Intelligence, which tracks ad spending. That was down 29 percent from the same period in 2008, the company reported.

Ad spending on print ads fell to $18.2 million in 2009 from $19.8 million in 2008. Internet publications won big, though, with a 105 percent increase in spending, although dollars spent were just $271,138 during the first nine months of the year, TNS Media Intelligence reported. A drop in print advertising by all sources, including auto dealers, is a key reason media outlets, including The Tampa Tribune, have had to lay off workers and reduce newspaper pages.

Like the PGA tournament, the Clearwater Threshers minor-league baseball team is trying to replace the sponsorship void left by dealerships.

Like most minor-league clubs, the Threshers, a Philadelphia Phillies affiliate, rely on campy promotions to entertain the crowd. In one of the Threshers' biggest promotions, a fan would be picked from the audience each inning and receive a key to a vehicle provided by Countryside Ford of Clearwater.

At the end of the game, all nine people would trot onto the field. The winner's key would unlock the vehicle, said John Timberlake, head of Florida operations for the Phillies. It's a promotion worth about $60,000 when factoring in the value of the advertising and media, Timberlake said.

This year, Countryside Ford wasn't able to participate because of cutbacks, Timberlake said.

"To the (National Football League) or the Buccaneers, $60,000 is a drop in the bucket, but to the Clearwater Threshers it's a significant cross-promotion," he said.

Reporter Michael Sasso can be reached at (813) 259-7865.

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