Lights Out! But Dealers Go Largely Unscathed

Dealers breathed a sigh of relief after last month's big power blackout, escaping serious damage and losses in metro markets most affected — Cleveland, Detroit and New York City.

In New York, where many dealerships were looted and vandalized during a power outage in 1977 (Ace Pontiac in the Bronx had more than 30 cars stolen off its lot), many dealers posted guards to prevent a reoccurrence.

“Civility prevailed this time,” said Mark Schienberg, executive vice president of the Greater New York Automobile Dealers Assn. “New Yorkers are a tough lot, even more so after Sept. 11.

“But one of our directors, a Bronx GM-Mitsubishi dealer who remembers the Jerome Avenue looting and thefts, said, ‘It doesn't hurt to be prepared.’ Fences can be smashed down, so guards were needed.”

Sales and service inconveniences and some lost sales were the main fallout for dealers until power was restored after the August 14 Thursday afternoon blackout punch that hit 50 million people.

Thursday night is a big sales and delivery night in the Detroit area, and the blackout hit late Thursday afternoon, effectively shutting most stores until the following Monday.

“We had eight new cars set for delivery Thursday night and Friday,” says Dale Koelzer, sales manager for Fox Volkswagen, Rochester Hills, MI. “Power wasn't restored until Saturday, when many of our customers and employees still were unable to get here. Fortunately, by Monday night, the other night dealers around here are open, we delivered the vehicles without any problem.”

Mike Boguth, general manager of Hamilton Chevrolet in Warren, MI, says the store the next morning had restored power but no customers. People didn't seem in a car-buying mood. Boguth ultimately closed up and sent the staff home that day.

At Saturn of Southfield (MI), several L-series Ion and Vue cars were out being tested Aug. 14 by prospects as part of GM's 24-hour free loaner promotion.

“They got an unexpected extension until Monday (Aug. 18),” says dealer principal Joe Serra. “All GM dealers were affected by that.”

The blackout hit Cleveland dealers closer to Lake Erie for a longer period than those farther from the lake. DeLorean Cadillac in Lakewood, OH, (owned by former GM vice-president John DeLorean's younger brother Mark) reopened the next morning.

The blackout stopped production at auto plants in the U.S. and Ontario. U.S. plants resumed some shifts Aug. 15, but Ontario's government asked plants to reduce electric use by 50% during the fragile power restoration. That curtailed schedules at a number of plants. The reduction was in effect 8 a.m.-8 p.m., into the week of August 17, causing cutbacks in schedules of such models as Ford F-series trucks, Chrysler minivans and the new Pacifica sport wagon, GM Silverado/Sierra trucks and Impala, Grand Prix and Regal cars.

The Pennsylvania Automotive Assn. (PAA) and the Toledo Automobile Dealers Assn. say none of their dealers were hit by the blackout despite the proximity to the Lake Erie electrical grid that went down for the count.

PAA's Peter Bauer says, “An Erie dealer, right on the lake and near the source of the breakdown in the power grid, said the local utility company had been alerted to the situation and took steps to prevent an outage.”