What would the effect on North Texas be if the Big Three automakers were forced to file for bankruptcy protection? Drew Campbell, president of the New Car Dealers Association of Metropolitan Dallas, thinks he knows. And it ain’t very pretty.
To measure the impact, Campbell says, consider first that Dallas-Fort Worth has roughly 230 franchised new-car dealers employing about 20,000 people and generating $21 billion in sales. Statewide, he says, car dealerships are responsible for 8 percent of Texas GDP and some $6 billion in sales taxes annually.
In Dallas, Tarrant, Collin, and Denton counties alone, there are 60 General Motors dealerships with 6,000 employees, Campbell says. GM’s SUV plant in Arlington, meantime, employs another 2,400 or so. Then there are all the ancillary local businesses connected with the vehicle industry, like AER, a family-owned company that provides engines for several big manufacturers.
“If GM goes under, it pulls the suppliers like AER under, too,” Campbell says. “It’s the domino effect.
“Bankruptcy means all activity would grind to a standstill. All dealership payments would cease, all warranties would cease,” he goes on. “Everything they’re doing is frozen. Take the Sewell organization–a $600 million to $800 million a year company. If they have no cash flow for 60 days, they go out of business.”
So, what does Campbell say to critics of congressional aid for the Big Three, like U.S. Rep. Jeb Hensarling of Dallas? “The patient is comatose, and his fever is rising,” he says, referring to the auto industry. “Do you want to wait for him to die? There’s no cure for dying. You can’t undo that.”
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