GILROY
A week after Gilroy Pontiac Buick GMC closed its doors, leaving 26 people without a job, owner Don Malinoff decided to shutter his nearby Gilroy Ford Lincoln Mercury franchise, leaving another 31 employees jobless, according to employees and the store’s general manager.
City Administrator Tom Haglund met with Malinoff and General Manager Joe Lopez Tuesday – three days after Malinoff locked the showroom doors while keeping the service garages open – to discuss the possibility of the city digging up some extra cash for the dealership, but Lopez said Wednesday that it was not likely any arrangement would be reached. Haglund was in meetings Wednesday afternoon and did not immediately return a message for comment.
This leaves Gilroy Chevrolet Cadillac as the city’s only GM dealer, and a block-lettered banner hanging from the building’s facade informed drivers-by that the dealership also services all GM makes and models.
Francisco Martinez, a technician at the Ford dealership for the past nine years, said Malinoff personally told him and his colleagues about the layoffs this afternoon. Martinez said he will return to his home in Watsonville and look for another service job.
“I’m going to have to start looking,” Martinez said as he and other employees organized their wrenches and tools while Martinez’s 5-year-old son, Ivan, helped out with over-sized, oil-stained gloves.
“I knew we were slow, but not this slow,” Martinez said.
When the Pontiac dealership closed last week, Lopez said the Ford store was in good standing, but the same financial troubles that taxed that store out of business also sent the Ford store under, he said.
“It’s the same scenario,” Lopez said at a desk just off the vacant showroom floor at the Pontiac dealership. “It’s unfortunate this happened just a week apart.”
Malinoff had been in negotiations to combine his dealerships with Courtesy Chevrolet in Morgan Hill, 17100 Laurel Road, but GM never approved the local merger, Lopez said.
“We were working with GM and thought we could see the light at the end of the tunnel, but that didn’t happen, and meanwhile, we were just bleeding money,” Lopez said, adding that he would look for a similar job because “I’m too old to go back to the strawberry fields.”
Outside, employees had already emptied the Pontiac lot of the 100 or so shiny sedans and hefty trucks worth about $3 million. GM will soon repossess those vehicles along with an additional $3 million worth of inventory at the Ford dealership, according to Lopez.
Malinoff owns the property and the building where the Pontiac dealership used to be, and the whole package is worth about $5.3 million, according to county tax records. Lopez said his boss, who has declined to comment, does not have plans to sell his limited-use lot unless the right offer comes around. Robert Scott Lynch owns the dirt underneath the shuttered Ford franchise, but Lopez said he was unsure what Lynch planned to do. Lynch could not immediately be reached for comment.
Nearby dealerships assured The Dispatch last week that they will stick around, but this latest closure puts additional pressure on them and also spells financial trouble for the city, which is already dealing with a 27-percent drop in sales tax revenue from auto vendors, which represents about $512,000, according to city figures.
GM received $13.4 billion in federal bailout money in December and spent Wednesday asking legislatures for more. That first handout, though, never made it to the front lines, leaving dealers with fewer financing options to offer customers and 60-percent fewer sales as a result, according to Joe Lopez.
