Category: Commentary/Editorial, Local Businesses, The Blacktop Jungle || By

John Naretto Buick closed yesterday after 30 years in business. Unlike other Mon-Yough area car dealerships that have disappeared in recent years, it wasn't sold to another dealer --- it just closed.

It also didn't declare bankruptcy. As first reported by Eric Slagle in Monday's Daily News (the story isn't available online), the dealership on Long Run Road was still making a profit, but General Motors wants all of its "standalone" Buick dealers to add Pontiacs and GMC trucks.

Naretto has always been proud to be one of the few exclusive Buick-only dealers; with Hamilton Buick-Pontiac-GMC located just up the road in Irwin, it would have been difficult, if not impossible, to add the other lines.

According to Slagle's story, the Naretto family looked into the future and decided --- I'm paraphrasing --- "to hell with it." The used car stock was sold to Tom Clark Chevrolet down the street, and the new cars are being sent back to GM.

. . .

I don't want to get into a big discussion of the auto industry; there are plenty of websites that do a thorough job of reporting on the topic every day. (The Truth About Cars is one; Jalopnik is another.)

And it's not exactly a surprise that American car dealers are hurting. Import dealers are suffering, too, because credit is tight across the board --- sales of VWs and Toyotas are also down. But while the rest of the industry is catching cold, the American companies have pneumonia: Chrysler's sales, for instance, are cratering.

Contrary to popular belief, in my opinion, products are not the most serious problem for Ford and GM. (I'm leaving Chrysler out of this because it was owned by Mercedes-Benz's parent company for nine years, and they really drove Chrysler off a cliff.)

Yes, everyone knows someone who had a Chevy Cavalier that went through three transmissions and five water pumps. They never seem to remember the Mazdas that had fenders composed of rust and duct tape.

I'd argue that Ford and GM cars are better-built than most of the European makes and about equal with the Japanese. J.D. Power's dependability ratings tend to bear me out.

. . .

Of course, American companies are in deeper trouble than the imports because they spent years hustling SUVs and trucks instead of fuel-efficient small cars, and now they're stuck with gas guzzlers nobody wants.

Why did they do this? Was it a conspiracy with "big oil"? Are they just stupid?

Neither. The Big Three is saddled with pension and health care costs that foreign competitors don't worry about, because those competitors are based in countries with government-sponsored, highly regulated pension plans and health insurance. (Yes, their residents pay much higher taxes, too.)

SUVs and trucks carry much bigger profit margins than small cars, which allowed GM, Ford and Chrysler to cope with their health care and pension expenses for a few years.

Also, fuel taxes are considerably higher in Europe and Japan than in the U.S.; their roads are more narrow and congested, too. The Japanese and European car companies don't make that many large cars because they didn't need them, and they can't sell them in their home markets, anyway.

. . .

All things considered, it's hard to fault the Narettos for deciding to get out while the getting's good. Things are liable to get worse before they get better. (NADA is predicting that 600 dealerships nationwide will close this year.)

I can understand why General Motors wants its dealers to sell a wider variety of brands --- it cuts the company's overhead. Servicing 500 big dealers is cheaper and easier than servicing 2,000 small dealers. (Chrysler and Ford are doing the same thing --- independent dealers are being told to add more volume or turn in their franchises. Witness the recent demise of Monongahela Ford.)

Still, it's a shame to see local, community dealers forced out of business. It's generally accepted in the car business that you're only as good as your dealer network. Plenty of people buy cars at least in part because they like their local dealer, not just on the merit of the product.

In other words, some percentage of John Naretto's customers were buying Buicks not because they liked Buicks, but because John Naretto sold them. With John Naretto gone, they may decide to go to another Buick dealer --- or they may decide to go down Route 48 to Bob Massie and look at Toyotas.

If the American car companies chase away too many of their remaining loyal customers by squeezing out their small dealers, it might be the final push they need to slip permanently into oblivion.

. . .

(P.S.: Incidentally, both Slagle and Kim Leonard of the Tribune-Review made the same minor boo-boo. They reported that Naretto was in White Oak for 30 years.

(As any longtime McKeesporter will know, until about 15 or 20 years ago, Naretto was on Lysle Boulevard, Downtown, where the Rite Aid is today. Naretto Buick is a direct descendant of Levine-Jones Buick and --- before that --- Sullivan Buick-Rambler.)

Correction, Not Perfection: This story originally mentioned Clairton's Carroll Pontiac. As an Almanac reader noted in the comments, the dealership has closed.