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Monday, November 22, 2010

Should I buy a Chevy or a Ford?

Ohio dealer Chris Haydocy heard it even at dinner parties: "Government Motors."

In conservative Buckeye country, it meant a fat "no, thank you" to vehicles from General Motors Co., whose majority stakeholder was the federal government.

Texas Chevrolet dealer Carroll Smith said he won't be happy until the government has sold its stake in GM. The IPO reduced U.S. ownership from 61 percent to about 33 percent.

Smith, who will sell about 1,600 new vehicles this year at Monument Chevrolet in Pasadena, Texas, is convinced that the stigma of government ownership cost him sales.

He said he has heard at the country club, especially from his Republican friends, how Ford Motor Co. deserved praise for not taking federal bailout money. "It's not quantifiable, but I'm sure it's happened," Smith said of lost sales.

He said he bought the maximum 800 shares of GM common stock offered at the IPO price to GM dealers, employees and retirees.

Tom Durant, a Dallas-area Chevrolet dealer and member of both the GM and Chevrolet dealer councils, said product will determine GM's future. With improving sales and a bankruptcy-scrubbed balance sheet, GM will have more money going forward to invest in product development, he said.

"We had new product coming out during bankruptcy and lots afterward," said Durant, owner of Classic Chevrolet. "That's what this game is all about."

This year, GM has launched the Chevrolet Cruze compact, the Chevy Volt plug-in sedan, heavy-duty full-sized pickups and the Buick Regal mid-sized sedan.

Ohio dealer Haydocy -- whose Haydocy Buick-GMC will sell about 500 new vehicles this year, about the same number as 2009 -- said nothing succeeds like success.

He said the good vibe from the IPO is likely to make some consumers curious again about GM vehicles, which should boost showroom traffic. Haydocy also owns a small Chevrolet, Buick and Cadillac store in Bucyrus, Ohio.

Said Haydocy: "People aren't investing because of civic pride; they want to see the story behind the success."

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