Surviving the General Motors fiasco

People in the automobile business have had a rough couple of years. Freddy Gonzalez, owner of Chaparral Buick GMC, knows firsthand about those hardships.

It all started a few years ago when Chrysler and General Motors had to file Chapter 11 bankruptcy and get bailed out by the government.

As part of the restructuring required by bankruptcy, both companies were looking to cut unproductive parts of their businesses. According to Popular Mechanics magazine, GM had 6,000-plus dealerships when the company had a market share of 40 to 50 percent. Today GM has a market share around 18 percent.

In 2009, GM announced it would cut nearly to 2,000 dealerships around the country to save costs. The dealerships were cut because GM not only had to compete with other car companies, but the company had dealers competing with each other.

'It was very scary, very scary... You didn’t know, it didn’t matter if you were profitable or not profitable, they didn’t care.'

       -Freddy Gonzalez Jr., sales manager

For Gonzalez, it was a scary time.

“That was a period of time right there that nobody in the automobile business had ever been through,” he said. “Nobody in the automobile business would have ever expected that we would go through something like that.”

Gonzalez has owned his dealership for 19 years, but has been involved in the car business for almost 40 years.

He grew up in a border town in South Texas with his three siblings. He got his start working for his dad. His father owned a used car business, and would let Gonzalez wash cars. Gonzalez described the washing cars as ”indoctrination” into the car business.

After high school, Gonzalez went to Texas A&M University. He graduated in four years with a degree in economics. He thinks his degree helped him become successful.

“The education I got in college helped me in the car business,” Gonzalez said. “There are one or two things in there that you carry with you forever.”

After college, Gonzalez served in the Army for two years active duty. He had been in the Reserve Officers Training Corps, or Corps of Cadets, at A&M for four years. After leaving the Army he served in the reserves for a few years.

Then he went to work for GM.

He worked in an office in Houston, Texas. Pretty soon he moved up to be a district sales manager in Louisiana, where he oversaw inventory for different dealerships. But he knew he wanted to move up and own a dealership.

His wife, Susan Gonzalez, told him that a dealership was for sale in Johnson City, Tenn. His first question was where is Johnson City?

“I didn’t even know this place existed,” Gonzalez said. “I thought Tennessee ended at Nashville.”

When the couple visited Johnson City, Susan fell in love with the area. She had family that lived close by and thought it would be a good fit. The first thing Gonzalez noticed was the openness of the people and how friendly they were. He said it reminded him of the area he grew up in where, “they were your friend without getting to know you first.”

After the couple had decided to buy the dealership, one thing was missing; a name. Gonzalez had an idea, but his wife had different ideas. He wanted to put his wife’s maiden name in the dealership, but she was having none of it.

As they were discussing the name on the way to a company picnic, Gonzalez looked off to the side of the road, and saw a name that could work.

“As I turned around, that name was sitting on a restaurant on the side of road. It was a Chaparral restaurant and had a little road runner sitting on top of it,” he said. “I said how about that word right there. She said ‘Great, that will work,’ and didn’t even look.”

Most of the Gonzalez family moved to Johnson City to start the dealership. His older daughter stayed behind in Louisiana, but his son moved with them and went to East Tennessee State University to get a degree in nursing.

Gonzalez's business was doing well, and he saw the area where his dealership is located turn into a haven for car dealers. The strip along the Bristol Highway has been named the “Motor Mile” because so many dealerships have sprung up around Chaparral.

But starting in 2007, a disturbing trend began to emerge.

Gonzalez began to notice his sales were going down. Sales usually go up and down at a car dealership, but his sales stayed down for the rest of the year. Then the Great Recession of 2008 hit, and his sales wouldn’t come back up for the next couple of years.

GM announced the closing of dealerships in 2009, and Chaparral’s sales were still down at that point. Gonzalez never thought Chaparral would be one of the dealerships that would close, but it was always in the back of his mind.

The closings worried his staff as well.

“It was very scary, very scary,” said Gonzalez’ son, Freddy Jr., the dealership's sales manager. “You didn’t have an inside track. You didn’t know, it didn’t matter if you were profitable or not profitable, they didn’t care.”

One thing that never changed was the approach Gonzalez and his staff had toward their dealership. Freddy Jr. said as a family they decided to not show any emotion, not show any fear but to approach every day like it was a normal day.

The reason Gonzalez took that approach was because he didn’t want his employees wondering if they would have a job the next day.

Today, Chaparral is still open. The staff at Chaparral believes Gonzalez had a lot to do with bringing the dealership through the most uncertain time in the 19-year history of the company.

“We didn’t know what was going to happen,” said the controller for Chaparral, Robin Jones. “I believe Freddy being the businessman he is, is why we kept the dealership. Business gets better every year.”

Freddy Jr. believes that period of time made the dealership stronger. He said the staff at Chaparral learned how to live without some luxuries and how to tighten up the operation as a whole.

Through all of the hardships, Gonzalez is still as hands-on as he was 19 years ago.

On a chilly September morning, he walked around his used car dealership checking what cars he had in his lot. He does this every week or so just to make sure he is up-to-date on his inventory.

Now he feels better prepared if another crisis ever hits the automobile industry.

“We’re happy we came out on the good end of it,” he said. “It has made us a lot stronger organization because of that. It has made us a lot smarter organization …

"Should that ever come about again, I think most of us will be able to react a lot quicker than we did. A lot of people didn’t make it because they didn’t react quickly enough and that is sad."