High Anxiety Along the Mile of Cars

Thursday, Nov 20, 2008  |  Updated 3:48 PM PDT
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High Anxiety Along the Mile of Cars

Travis MacKenzie

A sign of the times -- as a Dodge dealership closes shop during the economic downturn.

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As the Big Three automakers wait for word of a federal bailout, local car dealerships are feeling the pain too, by cutting jobs and in some cases, closing shop.

Nowhere is that anxiety higher than the Mile of Cars in National City.  Home to nearly two-dozen car dealerships, inventory is high and customer traffic is low. 

At McCune Chrysler Jeep, nearly 50 people -- or ten percent of the workforce -- have been cut in the last month. A few blocks down, San Diego Dodge is closing, costing nearly 100 people their jobs. The owner said gas prices and the economy killed his business.

"This dealership has been here 60 years and we've never dealt with anything that we're going through now, so the mood is definately a wait and see type thing," said Mike Palomato a general sales manager .

National City relies on its auto dealers more than most. The city counts on $4 to $5 million a year, just off the sales tax from the dealerships.   That money is used for basic services like police and fire. Even though sales are down across the industry, the mayor believes his city will weather the crisis.

"We have so many car dealerships here in National City and having the oldest car park in the United States… they're established so they aren't as susceptible to the ripples in the market.  But these more than ripples, these could be more like tidal waves," said Ron Morrison, National City Mayor

The mayor says an additional one cent sales tax that went into effect a couple of years ago has helped this city avoid some of the budget problems facing communities across the county, but still he says they are always looking at ways to cut costs.

In North County, a plan for a new CarMax used car dealership has caused a ripple of fear in Escondido.  The North County Times reported the Council approved plans for the business near Highway 78, despite concerns that new competition could further reduce already-plummeting profits at Escondido's existing dealerships.

Get more details in the story, "City Council Approves CarMax Lot Despite Competition Concerns."

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