Staff Reporter

As the strike at two General Motors Corp. parts plants enters its seventh week, Los Angeles-area GM dealers are feeling pinched.

Inventories have dwindled, forcing some customers to make do with colors, options or even models other than their first choice, or to buy from a rival manufacturer. For truck shoppers, GM's eagerly awaited new Silverado pickup trucks have not yet been delivered to lots.

"We're hurting big time. We have very limited inventory," said Badie Amar, sales manager for Chevrolet at the Felix Auto Center downtown.

Just 27 cars sat on the lot as of last week, compared to the 150 or so that are normally carried there. Instead of selling six or seven cars a day, Amar hadn't sold a single vehicle in two days.

At least half the dealership's customers are going elsewhere, to dealers selling such cars as Chryslers or Fords. And dealership employees are getting frustrated, fielding calls from people asking for models or colors that have run out.

It's not just Felix Auto Center that's hurting. GM's national market share for June was 31.2 percent, down from 32 percent in May, according to J.D. Power & Associates. While that may be a slight change in percentage terms, it represents a huge amount in terms of sales and vehicles. For each day the strike goes on, GM loses $80 million in sales and misses production of 20,000 vehicles.

"Whether they've lost sales that cannot be retrieved is not clear," said Bob Schnorbus, director of macro-economic analysis with J.D. Power in Detroit.

In addition to thinning inventory of some models, the United Auto Workers strike in Flint, Mich. also has raised doubts in buyers' minds that they can get what they want.

"The perception GM isn't producing vehicles is keeping people away and causing them to go to other dealerships," Schnorbus said. "I don't think things are that desperate yet, but it's getting harder to get what you want."

Those looking to trade in their old Chevy pickup for a new one may not want to wait. That has dealers concerned, he said, because when customers defect to a rival make, it's often tough to get them back. Even after the strike is settled, it will be at least two weeks and as long as a month before the dealerships get new deliveries.

One local dealer downplayed the effect of the strike, saying the media has blown it out of proportion.

"The public believes there are shortages of cars when there are not," said Steve Livingston, owner of Livingston Motor Car Co. in Woodland Hills, which sells Pontiacs and Buicks. "Inventories are good. Selection is good."

Livingston and others said buyers may be staying away more because of the heat than because of the strike. Still, Livingston conceded that his lot's inventory has dwindled to 175 cars, down from 250 normally.

"It's down a little, but not an alarming pace," Livingston said. "Many of us stocked up on cars in anticipation of the strike."

Some dealers have picked up the slack by diversifying into or bolstering their used-car business.

That's the strategy of Leo Hoffman Chevrolet-Geo in the City of Industry, said Bob Fernandez, general sales manager.

"We're out there buying later-model used cars," he said. "We're switching our advertising to used cars." So far, the strategy is offsetting the shortfall, he said.

On the new-car end, the dealership is down to a two-week supply, mostly Malibus and trucks, with very few of the popular Tahoes or Suburbans left, Fernandez said. And some new-car customers are staying away on the assumption prices would be higher.

The top-selling Chevrolet dealership in the county hasn't felt the squeeze quite as acutely as smaller competitors. At Gunderson Chevrolet in El Monte, there were still 500 vehicles on the lot last week.

"We've always carried a large amount of inventory. I'm probably in better shape than others," said Keith Ghanian, the new-car sales manager. "By the same token, 500 is good for 40 days of supply. Even though it's a huge number, in the future I'll be in the same position (as other dealers). I could normally carry at least twice as much."

While some customers have taken their business elsewhere when they couldn't get the exact car they wanted, loyal customers have been willing to accept another choice, he said. And they are being "a little more reasonable" about haggling.

"The ones that are for the first time buying Chevrolet will think twice about paying and possibly getting something they didn't want," he said.

Ghanian said he has been assuring employees the strike will be resolved and is contemplating altering the pay plan such as giving higher commissions on used vehicles to retain workers.

Another impact of the strike is the slight hesitancy of some dealers to trade models, he said. For example, if one dealer has a only white Corvette and the customer wants it in black, another dealer with the desired color may not want to give it up.

"The dealer would think, 'I'm not going to get any more, so I'll stick with what I have,' " Ghanian said.

But in an age when dealers can use the Internet to determine each other's inventory of cars, many dealers are discovering online how scant their fellow dealers' stock has become, so they don't even bother to call.

"You hear the phones ringing less," Fernandez said.

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