WARNER ROBINS — Eddie Wiggins is out of the car business, saying the poor economy of 2008 contributed to his downfall.
Wiggins confirmed Tuesday morning that he has closed his Buick Pontiac GMC dealership on Russell Parkway and will not reopen it.
But a couple of other General Motors dealerships in Houston County said Tuesday that their businesses are strong.
Jim Glymph, sales manager for Hamby Automotive Network in Perry, which sells Chevrolets, Buicks, Pontiacs and GMCs, said sales have been up.
“We’re getting a lot of business out of the rest of Houston County,” Glymph said. “December was our fourth-best month of 2008. It’s bad when any dealership closes, but our sales and service have been on the increase, and Eddie Wiggins closing may have bumped it up.”
Jeremy Shaughnessy, general manager of Five Star Chevrolet Cadillac in Warner Robins, said his dealership also is doing well.
“It is unfortunate for him that he is out of business, but we’re blessed. We had an extraordinary December, and business has been good so far in January,” Shaughnessy said. “We’re pretty fortunate. I won’t say Middle Georgia is recession-proof because of (Robins Air Force Base,) but it really helps.”
Wiggins didn’t feel recession-proof, however, saying the slow economy played a big part in his bankruptcy and closing. Sales had been off about 50 percent for much of 2008, he said.
Wiggins said GM’s withholding of about $140,000 in rebate and incentive payments since the end of November created a cash flow problem for him, but Tuesday he said it’s common for GM and GMAC, the company’s financial arm, to do that with struggling dealers.
Wiggins had been planning to sell his dealership and retire before his financial difficulties cropped up, he said.
“We were talking to a buyer, but then all this hit the fan and they backed out,” he said. “We looked for investors, but no one much wants to get into the car business right now with this economy.”
Wiggins said GM may try to find someone to open a new Buick Pontiac GMC dealership in Warner Robins, or it may try to fold the brands into existing local GM dealerships.
“I think Five Star may want some of it, but I don’t know what they will do,” Wiggins said. “Up until very recently, GM was wanting to spread its brands out to different dealers, but now they may be wanting to concentrate it all in fewer, bigger dealerships.”
Five Star’s Shaughnessy said Tuesday that GM has not approached the dealership about absorbing Wiggins’ brands, but he indicated he may be interested.
“Yeah, potentially, if they ask,” he said. “But we haven’t solicited anything. ... I don’t know what GM will decide to do in their realignment.”
Wiggins said he reached his agreement with General Motors and GMAC on Friday to go out of business. He filed for Chapter 11 bankruptcy Dec. 31 but remained open, saying he hoped to reorganize and bring in investors or find a buyer for the dealership. But Wiggins said Tuesday that GM and GMAC agreed to take control of his new and used car inventory and absolve him of any financial liability in liquidating it if he would agree to close.
“They wanted me to go away quietly, so that’s what we’re doing,” he said.
Wiggins said GM will take back the new cars and redistribute them to other dealers to sell. He said GMAC has agreed to offer the used cars to other dealers or sell them.
Wiggins estimates he had about $4 million in new cars and $1 million in his used car inventory when he closed Friday afternoon.
He said GM and GMAC also have claimed the parts and equipment in his inventory, but he will be given credit for that when it is moved or sold.
“They get everything to do with the dealership. The bank and I still have the property,” he said.
Wiggins said he and a few office employees will continue to work a few hours each day to complete paperwork on transactions made before he closed. The dealership had sold eight used cars and two new trucks since the beginning of the year, and anyone who bought from him will be able to have warranty work performed at any GM dealer.
Wiggins said several of his 47 employees already have found new jobs, and most of the others filed for unemployment Monday.
According to court documents that Wiggins filed for Chapter 11 protection, his dealership had estimated assets between $1 million and $10 million, but it also had estimated liabilities between the same amounts. The documents also included a list of creditors holding the 20 largest unsecured claims against his business. Those claims totaled $195,749.02.
Also listed in the papers was a motion filed Jan. 6 by GMAC for the court to prohibit the dealership from using any of its cash collateral because GMAC claimed it held first priority interest in all of the dealership’s new and used vehicle inventory, parts inventory, accounts and general intangibles.
The motion also indicated Wiggins’ dealership had been losing money at an average rate of $44,000 a month during 2008.
But Wiggins filed a counter motion the next day saying he needed the cash from sales and service to operate, and that GMAC would be paid first what it was owed whenever a car was sold. A hearing on those motions has been cancelled now that Wiggins agreed to close.
A meeting for creditors to address the court has been set for Feb. 2, but no other hearings have been scheduled, according to the online court docket.
Wiggins said he will retire after he finishes closing out his dealership and completing the bankruptcy proceedings, which he estimated may take up to six months.
“I’m going to go home and collect my Social Security,” he said.
A strong proponent of Robins Air Force Base and efforts to keep it vital and open, Wiggins said he would like to stay involved in the community but on a smaller scale.
“I’ll help with whatever I can if they ask,” he said. “It cost a lot being involved the way I was, and I won’t be able to do that anymore.”