Every day, General Motors dealer Doug Hawkinson eyes the import franchise application on his desk. He hasn't filled it out -- yet.
"I have not replied to them because I'm still fighting my fight, and I want to keep my GM franchise," says Hawkinson, general manager of Koronis Motor Group in Paynesville, Minn. "But there are bills to be paid, and we're not going away."
Hawkinson sold about 100 new vehicles last year and serves 35,000 people within 15 miles of his store.
In May, GM sent a termination letter to Hawkinson, 42, who is in line to get an equity stake in the store. He has to stop selling Chevrolets and Buicks by next October. In Paynesville, a town of 2,200 about 75 miles northwest of Minneapolis, several of Hawkinson's customers say that if the store closes, they'll abandon GM.
"I would look for something different to drive," says customer Jim Langmo, owner of Langmo Farms in Paynesville. "Service is greater than the vehicle's brand."
Here is what GM fears: that rural customers are more loyal to their dealerships than to GM brands. GM's top sales executive admits that he's worried that GM will lose customers.
Mark LaNeve, GM vice president of U.S. sales, says there are about 3 million "free agents" -- current GM customers who bought vehicles from stores that will close. About 30 percent of those customers are in rural markets, he says, meaning that about 900,000 GM owners are up for grabs.
As part of its plan to trim 1,350 U.S. stores by Oct. 31, 2010, GM plans to eliminate about 500 dealerships in rural markets.
"In the major markets, I'm completely confident," LaNeve said in an interview in late August. "In the rural markets, I'm a little worried about retaining the customers where we wound down a dealer. I'm nervous about that."
GM says dealership consolidations are needed to cut its expenses and to give remaining stores more sales, allowing for better facilities. But the move contradicts past GM statements that small-town dealerships were valuable because import brands have few stores in rural America.
Langmo, 74, drives a Chevrolet Avalanche pickup. He has bought new vehicles from Koronis Motors and its predecessor store since 1967. He has known his salesman for 25 years.
If GM terminates Koronis, Langmo will consider buying vehicles from the Ford dealership about a mile and a half from Koronis.
Surviving rural GM dealers say that it won't be easy to win business from the "free agents."
"One day, some farmer is going to say, 'We could go 100 miles to get a Chevy truck, but what do we do during the busy season if it breaks down?' " says one of GM's surviving rural Montana dealers, who asked to not be identified. "Rural American folks will buy from the local dealer, and they'll jump brands."
Rep. Blaine Luetkemeyer, R-Mo., made that point at a Sept. 16 hearing on dealership closings in rural communities. Noting that in many areas "there may have been only one or two GM and/or Chrysler dealerships to serve one or more counties," he said: "This could lead to drive times or tow times to get some service done."