The Free Press, Mankato, MN

Local News

May 31, 2009

Dealer appeals GM cut

Automaker severing ties with Town's Edge Auto of Mountain Lake

By Brian Ojanpa

MOUNTAIN LAKE — A Mountain Lake auto dealership isn’t taking its “Dear John” letter lying down.

Town’s Edge Auto has appealed General Motors’ decision to sever ties as the financially beleaguered automaker seeks to streamline U.S. dealership operations.

Town’s Edge General Manager Brian Harder said he doesn’t know what weight the appeal will carry with GM, but said the automaker would be making a mistake to rescind its franchise agreement with the dealership.

“Where they will be shocked is that our old customers aren’t going to drive 50 miles to Mankato (to buy a GM vehicle). They’ll go 10 miles to Windom to buy a Ford. GM is giving all this business to Ford,” Harder said.

He said under the worst-case scenario, GM would deny the appeal and Town’s Edge would lose its Chevrolet franchise in October 2010.

If that were to happen, Harder said Town’s Edge would stay in business but deal in used cars only. He said used vehicles now account for 80 percent of the dealership’s sales.

According to reports, 27 Minnesota dealerships stand to lose their GM franchises. That’s in addition to the loss of several state Chrysler dealerships for similar reasons as the auto industry struggles to right itself.

Harder said the Mountain Lake dealership is strong financially and benefits from a loyal area customer base that skews elderly and is reluctant to travel any distance to buy vehicles or get them serviced.

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