Courtesy Chevrolet closed its doors today after 12 years in
business in Morgan Hill. Employees there said they were told during
a noon meeting that the store was closing.
Courtesy Chevrolet closed its doors after 12 years in business in Morgan Hill. Employees said they were told during a noon meeting Friday that the store was closing.
The automobile industry was hit almost as hard as the housing industry as banking giants fell, causing the credit crunch that crippled consumers around the world. Dealers of American-made cars, like Courtesy, were hit especially hard and General Motors is talking bankruptcy.
Owner John Anderson, who operates another Courtesy Chevrolet in San Jose, did not return a call for comment Monday. Employees estimated that about 50 people were employed at the dealership.
Morgan Hill City Manager Ed Tewes said the dealership would be missed, and the city would redouble its efforts to find a dealership for 17100 Laurel Road spot.
“Courtesy Chevrolet and its predecessors have always been important corporate citizens of Morgan Hill,” Tewes said. “Their contributions to the civic life of the community will be missed. From the budget perspective, auto sales are a very important part of our sales tax base and the loss of Courtesy will mean that we should revise our sales tax projections into the future.”
Considering that Morgan Hill has an ailing general fund, currently short more than a million dollars, any car bought is a boon. As of December, when the city cut costs to close the budget gap, sales tax revenue was down more than $700,000.
In late January, the Morgan Hill City Council approved an estimated $155,000 tax break to the Ford Store in Morgan Hill to help the dealership, which opened in late 2004, weather the economic storm.
When someone buys a car from a local dealer, the city gets 1 percent in sales tax revenue. The city will not release how much sales tax revenue comes from either of Ford or Courtesy, since that would disclose how much money the store generates. However, city documents detailing Ford’s sales tax break use $40 million as a sample year’s taxable sales in a hypothetical equation. If Courtesy brought in $40 million in one year, that would mean $400,000 for the city.
In mid-February, Gilroy’s Pontiac Buick and Ford Lincoln Mercury stores closed.
Ford Store of Morgan Hill owner Tim Paulus said his store sold 120 cars in March, and was doing well.
“We have the new advantage program, where if someone lost their job, Ford will pay one year’s car payment up to $750 a month.” Paulus said he thought the program helped get people who were on the fence before into the driver’s seat.
“I think GM is struggling mightily, I wish them the best,” Paulus said, adding that he wasn’t sure how the closure would affect his business.
“It’s still too fresh to know. We’ll just have to see how that plays out,” he said.
Employees said the closure was suddenly announced, but rumors flew as certain changes were made that hinted that the closure was coming. For example, Chevrolet officials began liquidating the used vehicles on the lot – once they were sold, they weren’t replaced. Courtesy usually has about 20 used vehicles on its lot; as of Friday there were just three.
“The economic woes took a big bite out of (GM),” another sales worker said.
“It wasn’t a big surprise,” fleet salesman TR Smith said. “We kind of saw the handwriting on the wall. It’s kind of sad, it was a good store and they were good people to work for.”
Although the sales team was tight-lipped and stone-faced, mechanics in the service department were good spirited as they packed up their tools and equipment Friday afternoon.
“It’s a shame. We’d have never seen this coming four years ago,” Service Manager Ron Piccardo said. “We were so busy.”
Mechanic Joey Dias, who had worked at the store since it opened about 12 years ago, said the crew were joking Thursday that Friday was “D-Day,” after rumors had circulated that the store might close.
“I got two toolboxes to pack,” said Joey Dias, lamenting good-naturedly that his son Joe, who also worked in Courtesy’s service department, wasn’t there that day to help him pack up.
Dias said he had a few job leads already. All employees were laid off.
Dias said the service department manager at the San Jose Courtesy assured him he’d call Dias first if there was an opening. The Gilroy Chevrolet seemed to be a promising job lead as well, Dias said.
“I just wanted to stick it out as long as I could here, I’m not a job hopper,” he said. “They came out here, shook my hand and apologized. I just said, ‘Look, you did all you could do.'”
Mechanic Tim Wood said he was waiting to hear about a mechanic job with Santa Clara County. He started to look for a new job in January.
“We knew it was coming,” Wood said. “It was just a matter of time. We knew nine months ago.”
Service Advisor Russ Thomas said he’d worked for Chevrolet since 1990, including four years at the Courtesy store.
“I would like to thank the community for their support,” Thomas said.
