Houston Dealers Dodge Bullet

Dealers in Houston, TX, seemingly dodged a bullet when Hurricane Ike blew through on Sept. 13, but the aftermath will prove challenging as thousands of evacuees remain without food, water or electricity.

“We have dealers that are in different stages depending on what part of town they're in,” says Walter Wainwright, president-Houston Automobile Dealers Assn. “Some dealers are still without power, some have partial power and some have power.”

HADA represents 190 dealers in Texas, which employ about 30,000 people.

The damage caused by Ike to auto dealerships proves to be nothing like Tropical Storm Allison in 2001, which dumped nearly 40 inches of rain and flooded hundreds of thousands of vehicles.

It was dubbed “The Most Expensive Storm in U.S. History.”

Allison remained tropical or subtropical for 15 days, and caused more than $6 billion in property damage.

“It's not that kind of thing,” Wainwright says of the most recent hurricade to take aim at the area. “I talked to about 15 dealerships and I've not talked to anybody who said their dealership was destroyed.

“This hurricane swept through. There may have been some parts that got 5 to 10 inches of rain, but it was nothing like Allison in terms of flood damage (to the cars and trucks). With Allison we didn't have the winds, but some of the most horrific floods we've ever had.”

Wainwright says his dealership body hasn't reported any massive structural or inventory damage, but that HADA “doesn't have a clue about dealerships near Galveston,” where they have a few members.

“I talked to one dealer that has a dealership on the Gulf Freeway and they did OK,” he says. “I have a feeling that most of our stores are starting to open. Some have even opened without power just to help customers who need service. They are all doing as best they can. A lot of the body shops and service departments are going to be really busy trying to deal with damage.”

Hundreds of Texas dealerships, representing all makes and models, were in the hurricane's path.

In the aftermath, day-to-day operations can't be described as “business as usual,” but several dealerships have quickly rebounded to open for consumers or plan to open much sooner than later.

“We consider ourselves very lucky in the Houston-metro area, as it appears that Hurricane Ike spared significant loss of life,” says Earl J. Hesterberg, president and CEO of Group 1 Automotive, which owns and operates 100 automotive dealerships in the U.S.

Group 1's corporate office in the Houston area sustained some minor damage, but power and phones have been restored and the headquarters reopened on Sept. 16.

“We are making good progress here in Houston in restoring our business operations; the corporate office is open with full power, data and employees,” says Pete DeLongchamps, Group 1's vice president-manufacturer relations and public affairs.

Group 1 says that it has been in contact with most of its employees that were impacted by Hurricane Ike and by all reports they were safe.

As for Group 1's nine Houston-area dealerships, the Fortune 500 automotive retailer says only minor damage was sustained at a few of the stores, such as broken windows and minor flooding.

The company's six Beaumont, TX, dealerships felt the effects of Ike much more, as roofs were damaged and they experienced significant power outages.

Many of the company's customers, and potential car and truck buyers in Texas, remain without power.

Company officials anticipate it will take a week or two before operations are “back to pre-storm levels.”

In comparison, Toyota Motor Sales Executive Vice President Jim Lentz says that 20 of its 24 dealerships in the Houston area were without power as of Sept. 16. Other than that, it appears its dealers suffered minimal damage to facilities and inventory.