Top Auto Dealer Calls Out Carmakers for Hypocrisy on Cutbacks

(Bloomberg) -- As American automakers announce plans to idle factories and cut workers, they are asking dealers to invest millions to upgrade their stores, which “doesn’t make sense,” according to one of the top U.S. car retailers.

“I find it a little ironic that there are plant closings, and they’re asking us to remodel our showrooms,” Wes Lutz, chairman of the National Automobile Dealers Association, said on a conference call Thursday with reporters and other dealers. “They’re cutting back; we’re ramping up.”

Lutz was responding to dealer Bob Tasca of Tasca Automotive Group in Johnston, Rhode Island. “The manufacturers right now are putting extreme pressure on their dealers to spend millions of dollars on bricks and mortar,” Tasca said. “And if they don’t, you basically have not a heck of a lot of choice because it dramatically affects your margins.”

The dealers’ frustration comes after President Donald Trump expressed anger over General Motors Co.’s plans to close four U.S. factories and eliminate more than 14,000 jobs. Ford Motor Co. also is cutting salaried jobs and eliminating shifts at its plants as it moves hourly employees to other factories to keep them working. The NADA is predicting that U.S. car and light-duty truck sales will fall to 16.8 million in 2019, down 1.1 percent from this year.

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