Los Gatos Chevrolet next door is a big empty lot with a “for sale” sign planted in a strip of brown lawn, a father-son business that couldn’t survive the recession. The Swanson Ford showroom across the street, once a thriving family business, is now displaying solar panels for a green-tech company. Its old body shop up the road caught fire after it closed a few years ago, leaving a charred shell with graffiti splattered under Swanson’s big blue letters.
In between is the glint of shiny Detroit steel — Moore Buick-Pontiac-GMC — the last domestic auto dealership in Los Gatos, a town that was home to 14 dealerships after Edward Moore opened his lot in 1951. (A recent exhibit at the Los Gatos History Museum showcasing the glory days of Los Gatos car dealerships was surely well-intended.)
The Moores’ three-generation family business has lasted despite the exodus to the auto malls and the Californian fascination with imports. But as much as John Moore, who took over from his father, has tried to convince his 36-year-old son that people can’t drive cars with 200,000 miles on them forever, that they will need new cars someday, he lies awake at night.
“I don’t want this thing to die on my watch,” said Moore, 60, who started sweeping floors and washing windows at his father’s dealership when he was 12.
Troubled automakers
Never has the news out of Detroit been more grim, with Chrysler declaring bankruptcy last month and ordering the closing by June 9 of 789 dealerships — nearly a third of its dealers. Now General Motors appears on the verge of following suit. Already, GM has pledged that by late 2010, it will reduce its number of dealerships from more than 6,000 to 3,400. If GM declares bankruptcy, as many believe is imminent, “they could do like Chrysler and give you 30 days,” Moore lamented.
The bankruptcy news doesn’t even count the number of dealerships that simply couldn’t endure the economic downturn. In Santa Clara County over the past two years, the number of dealerships has slipped from 88 to 68. Across the Bay Area, that number dropped from about 300 to 225. So far this year, two San Jose dealerships closed: Capitol Buick-Pontiac-GMC in January and, just a few weeks ago, Hartzheim Dodge on Capitol Expressway.
Sales of Japanese imports have dropped dramatically, too. But while Toyota and Lexus have four dealerships and 30 percent of market share in Santa Clara County, for instance, GM has seven dealerships in the county competing for barely 7 percent of market share.
“The import brands can weather the storm much more effectively because they don’t have 6,000-plus dealerships,” said auto industry analyst Jesse Toprak of the automotive consumer Web site Edmunds.com. “Having little competition from their own brand enables them to survive much better than the domestics.”
Slimmer profit
Business seemed so easy in Ed Moore’s day, when GM held 51 percent market share and profit on car sales was upward of 25 percent. On a $4,000 car back then, that meant $1,000 profit. Today, with prices at about $30,000 a vehicle, John Moore says he’s lucky to still make $1,000 on a car.
But he has reason to be hopeful. Even though sales are down overall, the Moore dealership in March was No. 1 in sales among Buick-Pontiac-GMC dealers in Northern California and Nevada.
And with 10 of 18 Buick-Pontiac-GMC dealerships closing in the Bay Area over the past year, the Moore service business has been even better.
Yet when GM sent its first round of closing notices earlier this month to about 1,100 dealerships, John Moore sat at his desk under the portrait of his father and waited nervously for the 10 a.m. delivery from the FedEx truck. Luckily, it carried no letter from GM.
A week later, a longtime customer popped her head into Moore’s office.
“Hi, Carol,” Moore said, leaning back in his chair.
“I’m glad you got the good news,” she said.
“We’re not over the goal line yet,” Moore replied.
Another letter could come any time. It’s painful to think about. Like many family-owned dealerships, the Moore dealership has meant a lot to the community.
Moore’s logo has graced Little League jerseys and local ball fields, the Skyland Mountain Run put on by a local church and some two dozen local golf tournaments, including one held by the Jewish Community Center. Moore even helped sponsor Blossom Hill Elementary School’s Pumpkin Palooza.
Despite the downturn, the dealership has maintained its sponsorships. “We haven’t scaled back,” he said, “relationships are important.”
For decades, car dealerships were a significant contributor to the town’s budget. In the late 1990s, they sent about $2.5 million annually into town coffers, or 42 percent of all sales tax revenue in Los Gatos. By the end of 2008, however, with only four remaining dealerships, it had dwindled to 12 percent of all sales tax revenue, or $1 million.
In good times and bad, the Moore dealership has been a tightknit operation. John Moore’s brother-in-law, David Burt, is the finance director at the dealership, and Moore’s son, Bret, is the general sales manager. Many of their employees have been with the company 20 or 30 years. And unlike most of the dealerships that have gone out of business recently, the Moore family owns the dealership property on Los Gatos Boulevard.
It has helped them survive while other dealerships paying high rents haven’t, including Los Gatos Chevrolet next door and others on Capitol Expressway and Stevens Creek Boulevard. But with only a Honda, Acura and a luxury import dealership left in Los Gatos, Moore is almost an island.
“In five years, I don’t think there will be any car dealers in Los Gatos,” Moore said, explaining that the town is losing a critical concentration of dealers that draw customers like “antique rows” do with seekers of vintage items. It may be up to his son to decide whether to relocate to a high-traffic area like an auto mall.
Just as Moore has tried to convince his son that the dealership will endure, so, too, has Bret Moore tried to convince his wife.
‘Worst-case scenario’
“I continue to assure her that everything is going to be great,” said Bret Moore, who began working at the dealership in his 20s. “In the worst-case scenario, I have confidence I can go out and do something else. But I love our business. I have no desire to do anything else.”
And even though the Pontiac brand is being discontinued and will no longer appear on the big white sign out front, Bret Moore is optimistic the Moore name will remain. He still hopes that one day, at least one of his three daughters will be able to step into his shoes and be the fourth generation of Moores to carry on the family business.
If the Moore family can just avoid the next round of closures and endure long enough to see the economy rebound, John Moore says they should be OK.
“Hopefully we’ll survive,” he said. “It will be good for the ones that do.”
Contact Julia Prodis Sulek at jsulek@mercurynews.com or 408-278-3409.
