Hundreds of Pennsylvania dealerships have been forced to close physical sales operations under an order from Gov. Tom Wolf that all non-life-sustaining businesses close effective Thursday evening to help slow the spread of the coronavirus.
Dealerships in New York, California, Illinois, and other states face similar types of government orders as leaders try to quell the spread of the virus, but terms and definitions vary by state. The key question: Are auto dealerships an "essential" business?
The Pennsylvania Automotive Association said dealership sales operations were to cease at 8 p.m. Thursday, while service, repair and parts may remain open, according to a post on its website.
"To protect the health and safety of all Pennsylvanians, we need to take more aggressive mitigation actions," Wolf said in a statement. "This virus is an invisible danger that could be present everywhere. We need to act with the strength we use against any other severe threat. And, we need to act now before the illness spreads more widely."
A state list of impacted businesses says automobile dealers may not continue to operate physical operations, while automotive parts, accessories and tire stores and automotive repair and maintenance stores can stay open.
"We are looking to get further clarification regarding Internet sales and delivery," the dealer association said on its website.
John Devlin, CEO of the Pennsylvania Automotive Association, said the group is advocating for sales to remain open for its 880 new-vehicle dealers and about 90 medium-duty and heavy-duty dealers.
"All of them support essential services that remain open, hospitals, pharmacies and food stores just to name a few," Devlin said in an email to Automotive News. "People need transportation to get to these critical jobs and we should not send them to a neighboring state if they want to buy, lease, rent and receive a loaner."
Wolf previously had requested nonessential businesses in four counties near Philadelphia be shut for 14 days to help prevent the spread of the virus.
New York, Illinois
Meanwhile, New York Gov. Andrew Cuomo on Friday said he planned to sign an executive order mandating that 100 percent of the state’s workforce stay home, excluding essential services. The order takes effect Sunday at 8 p.m.
Auto repair facilities have been deemed essential, and so can continue operating after the order takes effect.
Mark Schienberg, president of the Greater New York Automobile Dealers Association, said he has been having conversations with the governor’s office about a modification to the order to allow for digital and remote vehicle sales transactions.
Otherwise, dealership sales showrooms in New York will have to close Sunday at 8 p.m. until further notice. Messages seeking comment were left with the governors’ office Friday afternoon.
Also, Illinois Gov. J.B. Pritzker on Friday ordered Illinois residents “not involved in ‘essential’ activities to stay home for at least the next two weeks,” according to Crain’s Chicago Business, an affiliate of Automotive News.
Illinois Automobile Dealers Association President Pete Sander said Friday that his organization believes the 750 franchised car and truck dealerships in the state can keep service and sales open and is pleased the governor recognizes dealerships are essential businesses.
Sander, citing the order, said gas stations, auto supply stores, auto repair and related facilities and bicycle shops are considered essential businesses in the transportation sector.
The association said in an update on its website Wednesday that it had reached out to the Illinois governor’s office asking that he deem dealerships as an essential business.
“We specifically requested that Illinois ensure that our state’s motor vehicle fleet remains as safe and operational as possible by considering vehicle repair, maintenance and sales facilities as essential operations when officials impose certain requirements due to the coronavirus outbreak,” according to the association.
Layoffs begin
Rob Cochran, CEO of the #1 Cochran dealership group with about two dozen rooftops in Pennsylvania, is temporarily laying off a several hundred employees after he had to shut down sales operations Thursday evening.
“We closed the sales side of all the stores as required by law,” he told Automotive News. “Now we’ll be operating the service and parts areas moving forward and just doing the very best we can to take care of our customers and make sure their vehicles are operating properly, safety recalls are executed and keep our team members in the safest possible environment.”
Cochran said sales had dipped in recent days, but service has been “virtually normal.”
“One could debate the essentiality of sales because there are people out there that need a car if something happens to their car and they need to get another car,” he said. “But unfortunately there’s a disagreement in that position with that state.”
Cochran said he is hopeful he’ll be able to operate some form of Internet sales going forward.
On Thursday, the U.S. Department of Homeland Security and Cybersecurity and Infrastructure Security Agency issued guidance that lists automotive repair and maintenance facilities among the essential critical infrastructure workforce. Dealership sales operations are not listed. The guidance is aimed to help state and local officials as they consider restrictions due to coronavirus.
California open or close?
Also Thursday, California Gov. Gavin Newsom announced a stay-at-home order for Californians to mitigate the impact of the virus. Numerous counties and municipalities in the state had issued similar orders earlier that led to some dealerships closing or opting to shut sales operations while service continued.
It was not immediately clear whether dealerships would be among businesses forced to close in California under the governor's order, which says workers in 16 "critical infrastructure sectors" can continue their work. One of those sectors is transportation systems.
Brian Maas, president of the California New Car Dealers Association, said his association is working to get clarity from the governor’s office on whether Newsom’s order preempts local orders and if auto sales are prohibited.
Maas said that on Thursday, Los Angeles city and county both issued orders impacting dealerships, further leading to confusion.
“They’re all scrambling to try to figure out what this means,” Maas said of the 1,400 rooftops across California.
Maas said the association believes under the governor’s order and under federal guidance that service and parts can remain open.
But until the association has an answer from the governor’s office “we’re suggesting to dealers that they strongly consider minimizing sales activity.”
CarMax, the nation’s largest used-vehicle retailer, said Friday it temporarily closed 27 stores in California until further notice, and now had 38 stores closed due to the coronavirus -- up from five earlier in the week.
The retailer said stores in Doral and Miami Lakes, Fla., would be closed effective Friday through March 27. It also temporarily had four stores closed in Nevada and five in Pennsylvania.
Retail giant AutoNation Inc.'s California stores remain open, Chief Marketing Officer Marc Cannon said early Friday.
"Every store is open for sales and service," he said. "We're an essential business."
AutoNation, the nation's largest new-vehicle retailer, launched "store to door" home delivery nationwide this week, and it has been going strong, Cannon said.
David Muller contributed to this report.
