Katrina wipes out New Orleans dealers
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Katrina wipes out New Orleans dealers
It will be a very long time before the next new or used car is sold in New Orleans.
With water from Lake Pontchartrain draining into the city on Wednesday in the aftermath of Hurricane Katrina, New Orleans' 75 to 80 new-car dealerships may be a total loss.
"All of the New Orleans metro stores are assumed to be gone because of the rising water," Brett Brown, DaimlerChrysler district sales manager in Baton Rouge, told Automotive News. His territory also includes some New Orleans suburbs.
Brown said 15 stores in New Orleans are in "unknown status."
"Most of the cars are underwater or have water damage," Brown said. "The devastation is unbelievable."
Many automakers said they don't know the extent of the damage to their dealerships in the coastal regions of Alabama, Louisiana and Mississippi, the area that took the major impact from the Category 4 hurricane late Sunday and early Monday.
"The automobile business has just about come to a halt," said Marshall Hebert, owner of Hebert's Town and Country Jeep in Shreveport, La. "Nothing's going on."
Hebert, the National Automobile Dealer Association state director for Louisiana, said dealers in New Orleans are out of business for the foreseeable future. He said dealers did not have time to move their inventories.
"I have a friend who decided to ride it out, and we're still trying to find him," he said.
Hebert also said some dealers on the coast may not have been carrying enough insurance to cover their buildings and inventories. He said some of those dealers found that insurance was too expensive or that companies wouldn't write policies because of damage caused by past storms.
Plants back at work
Four auto assembly plants are located in states affected by the storm:
Mercedes-Benz builds the M-class SUV in Vance, Ala.
Hyundai's Sonata plant is in Montgomery, Ala.
General Motors has a truck plant in Shreveport, La.
Nissan's plant in Canton, Miss., builds the Titan truck, Quest minivan, Altima sedan and two SUVs.
No factories reported heavy damage from the storm. The longest production stoppage was at Nissan's Canton plant in central Mississippi. The plant closed Monday evening and reopened on Wednesday. General Motors and Ford say it's too early to know how the storm will affect production.
The storm slammed ashore with winds as high as 145 mph, drowning entire neighborhoods and wiping out roads and much of Interstate 10, which runs through the region. The storm also caused breeches of two levees that protect New Orleans from Lake Pontchartrain.
The entire auto industry is likely to be affected by Hurricane Katrina.
The impact
Used-car prices: Prices of undamaged, secondhand vehicles could soar. Many residents in the storm area who were underinsured may not be able to afford new cars once their insurance companies pay for destroyed homes and vehicles.
A few used-car auctions are in the area that sustained damage, but the extent of that damage is not yet known. Ray Nichols is CEO of BSC America Cos., which owns Auto Auction of New Orleans. The 40-acre, five-lane auction site is on the east side of New Orleans and is situated on higher ground that many other areas in the city. Its site is surrounded by canals on three sides and has a pumping system.
BSC's site did not sustain damage in previous storms, but Nichols says he has no idea how the facility made out this week. He assumes it did not escape the water and wind that devastated the city.
Nichols has assembled a catastrophe team of contractors and electricians armed with generators, trucks, other equipment and two motor homes that stand ready to inspect and repair the site when he gets clearance from authorities to deploy them.
Raw materials: The wreckage and flooding along the Gulf Coast has halted steel shipments through the Port of New Orleans. Higher steel prices are on the way, according to Charles Bradford, metals analyst at Soleil Securities Inc. in New York.
But only a small portion of steel imported through Gulf Coast ports typically is destined for the Big 3 and transplant automakers because they buy from domestic sources, Bradford says.
Auto parts and rubber also travel through New Orleans to reach suppliers' and automakers' northern plants.
Gasoline prices: The storm shut down refineries in the New Orleans area, causing an almost immediate increase in gas prices. For example, at one filling station in Detroit on Tuesday, the per-gallon price for unleaded premium gasoline jumped about 20 cents to $3.09. A Louisville, Ky., station was charging $2.50 for one gallon of unleaded regular gasoline on Monday; on Tuesday, that price jumped to $2.73.
Higher gasoline prices could dramatically hurt sales of the gas-guzzling trucks and SUVs that Detroit automakers depend on for the bulk of their profits.
Paul Ballew, GM's director of global market and industry analysis, said the impact on sales of fuel-thirsty pickups and SUVs was something the world's largest automaker was "wrestling with each and every day," Reuters reported.
At least one analyst said he believes gasoline will reach $4 per gallon.
"There's no question gas will hit $4 a gallon," Ben Brockwell told CNN. "The question is how high will it go and how long will it last?"
Donations from automakers: Automakers on Wednesday were firming up plans to help residents and their dealers in the storm zone.
On Wednesday GM gave the Red Cross $400,000 and pledged another $250,000. GM also has given the Red Cross free use of cars and trucks.
A Toyota Motor Sales U.S.A. Inc. spokesman says the automaker likely will donate at least $1 million. Toyota officials were deciding Wednesday how best to distribute the funds. The company also will set up a program that allows employees to donate to a relief fund that Toyota will match, said Toyota spokesman Xavier Dominicis in California.
Ford Motor Co. has pledged $100,000, and that likely will go higher once Ford officials have assessed the situation, a company spokesman told Automotive News. Ford, the Chrysler group and other automakers have offered their customers in the storm zone temporary relief from vehicle payments. Ford also is offering storm-area residents a $750 rebate toward the purchase of most new Ford vehicles.
DaimlerChrysler said Wednesday it will donate $500,000 to hurricane relief.
Emergency officials won't let people into the New Orleans area, so many automakers say they don't know how bad the damage is to their dealerships and facilities. But in other areas, such as Mobile, Ala., officials have been able to get a close look at the devastation.
It's "certainly not the kind of catastrophic damage we've seen in Mississippi and Louisiana," said Thomas Dart, president of Automobile Dealers Association of Alabama. "So we're thankful for that. The entire auto industry is likely to be affected in some way by Hurricane Katrina."
Greg Migliore, Robert Sherefkin, Arlena Sawyers and Gail Kachadourian contributed to this report
With water from Lake Pontchartrain draining into the city on Wednesday in the aftermath of Hurricane Katrina, New Orleans' 75 to 80 new-car dealerships may be a total loss.
"All of the New Orleans metro stores are assumed to be gone because of the rising water," Brett Brown, DaimlerChrysler district sales manager in Baton Rouge, told Automotive News. His territory also includes some New Orleans suburbs.
Brown said 15 stores in New Orleans are in "unknown status."
"Most of the cars are underwater or have water damage," Brown said. "The devastation is unbelievable."
Many automakers said they don't know the extent of the damage to their dealerships in the coastal regions of Alabama, Louisiana and Mississippi, the area that took the major impact from the Category 4 hurricane late Sunday and early Monday.
"The automobile business has just about come to a halt," said Marshall Hebert, owner of Hebert's Town and Country Jeep in Shreveport, La. "Nothing's going on."
Hebert, the National Automobile Dealer Association state director for Louisiana, said dealers in New Orleans are out of business for the foreseeable future. He said dealers did not have time to move their inventories.
"I have a friend who decided to ride it out, and we're still trying to find him," he said.
Hebert also said some dealers on the coast may not have been carrying enough insurance to cover their buildings and inventories. He said some of those dealers found that insurance was too expensive or that companies wouldn't write policies because of damage caused by past storms.
Plants back at work
Four auto assembly plants are located in states affected by the storm:
Mercedes-Benz builds the M-class SUV in Vance, Ala.
Hyundai's Sonata plant is in Montgomery, Ala.
General Motors has a truck plant in Shreveport, La.
Nissan's plant in Canton, Miss., builds the Titan truck, Quest minivan, Altima sedan and two SUVs.
No factories reported heavy damage from the storm. The longest production stoppage was at Nissan's Canton plant in central Mississippi. The plant closed Monday evening and reopened on Wednesday. General Motors and Ford say it's too early to know how the storm will affect production.
The storm slammed ashore with winds as high as 145 mph, drowning entire neighborhoods and wiping out roads and much of Interstate 10, which runs through the region. The storm also caused breeches of two levees that protect New Orleans from Lake Pontchartrain.
The entire auto industry is likely to be affected by Hurricane Katrina.
The impact
Used-car prices: Prices of undamaged, secondhand vehicles could soar. Many residents in the storm area who were underinsured may not be able to afford new cars once their insurance companies pay for destroyed homes and vehicles.
A few used-car auctions are in the area that sustained damage, but the extent of that damage is not yet known. Ray Nichols is CEO of BSC America Cos., which owns Auto Auction of New Orleans. The 40-acre, five-lane auction site is on the east side of New Orleans and is situated on higher ground that many other areas in the city. Its site is surrounded by canals on three sides and has a pumping system.
BSC's site did not sustain damage in previous storms, but Nichols says he has no idea how the facility made out this week. He assumes it did not escape the water and wind that devastated the city.
Nichols has assembled a catastrophe team of contractors and electricians armed with generators, trucks, other equipment and two motor homes that stand ready to inspect and repair the site when he gets clearance from authorities to deploy them.
Raw materials: The wreckage and flooding along the Gulf Coast has halted steel shipments through the Port of New Orleans. Higher steel prices are on the way, according to Charles Bradford, metals analyst at Soleil Securities Inc. in New York.
But only a small portion of steel imported through Gulf Coast ports typically is destined for the Big 3 and transplant automakers because they buy from domestic sources, Bradford says.
Auto parts and rubber also travel through New Orleans to reach suppliers' and automakers' northern plants.
Gasoline prices: The storm shut down refineries in the New Orleans area, causing an almost immediate increase in gas prices. For example, at one filling station in Detroit on Tuesday, the per-gallon price for unleaded premium gasoline jumped about 20 cents to $3.09. A Louisville, Ky., station was charging $2.50 for one gallon of unleaded regular gasoline on Monday; on Tuesday, that price jumped to $2.73.
Higher gasoline prices could dramatically hurt sales of the gas-guzzling trucks and SUVs that Detroit automakers depend on for the bulk of their profits.
Paul Ballew, GM's director of global market and industry analysis, said the impact on sales of fuel-thirsty pickups and SUVs was something the world's largest automaker was "wrestling with each and every day," Reuters reported.
At least one analyst said he believes gasoline will reach $4 per gallon.
"There's no question gas will hit $4 a gallon," Ben Brockwell told CNN. "The question is how high will it go and how long will it last?"
Donations from automakers: Automakers on Wednesday were firming up plans to help residents and their dealers in the storm zone.
On Wednesday GM gave the Red Cross $400,000 and pledged another $250,000. GM also has given the Red Cross free use of cars and trucks.
A Toyota Motor Sales U.S.A. Inc. spokesman says the automaker likely will donate at least $1 million. Toyota officials were deciding Wednesday how best to distribute the funds. The company also will set up a program that allows employees to donate to a relief fund that Toyota will match, said Toyota spokesman Xavier Dominicis in California.
Ford Motor Co. has pledged $100,000, and that likely will go higher once Ford officials have assessed the situation, a company spokesman told Automotive News. Ford, the Chrysler group and other automakers have offered their customers in the storm zone temporary relief from vehicle payments. Ford also is offering storm-area residents a $750 rebate toward the purchase of most new Ford vehicles.
DaimlerChrysler said Wednesday it will donate $500,000 to hurricane relief.
Emergency officials won't let people into the New Orleans area, so many automakers say they don't know how bad the damage is to their dealerships and facilities. But in other areas, such as Mobile, Ala., officials have been able to get a close look at the devastation.
It's "certainly not the kind of catastrophic damage we've seen in Mississippi and Louisiana," said Thomas Dart, president of Automobile Dealers Association of Alabama. "So we're thankful for that. The entire auto industry is likely to be affected in some way by Hurricane Katrina."
Greg Migliore, Robert Sherefkin, Arlena Sawyers and Gail Kachadourian contributed to this report
CL Community Team
Joined: Oct 2002
Posts: 30,283
Likes: 363
From: Canada
Katrina Shatters Auto World, Too
Automotive losses underscore the human ones.
by Mike Davis (2005-09-05)
Despite the satellite monitoring which feeds our minute-by-minute weather reports, Hurricane Katrina became hazardous to theGulf Coast so fast that people and businesses in its path could scarcely act. As in most such catastrophes, the public's and media's focus is first on people, then on destruction of real property and the economy. So the automotive aspects are almost an afterthought.
Katrina struck the Gulf Coast southeast of New Orleans at 6 a.m. on Monday, August 29. On the previous business day, Friday the 26th, the force and direction of the storm was still indefinite. And about 100,000 of them in Louisiana alone decided the danger wasn't imminent enough to evacuate or couldn't physically do so.
Their vehicles were left behind to swim out the storm, along with others, mostly left behind one or more of the family's other sets of wheels. A lot of the left-behinds were rolled up like wads of used Kleenex.
For the most part, businesses like auto dealerships didn't get the word to close until sometime over the weekend. This left a lot of customer cars and trucks in the service departments, or even new models awaiting Monday delivery.
The hurricane thus destroyed tens of thousands if not hundreds of thousands of vehicles in three strokes: first, those directly impacted by winds or surges of water driven by the winds; second, by falling trees and collapsing buildings including garages, and lastly, especially in New Orleans, by flood waters pouring in after the levees broke. I've seen no media reports, but it seems likely some vehicles and their occupants* vanished when countless highway bridges collapsed. These lost vehicles include not only those of private owners, but companies, institutions, governments and automobile dealership inventories.
In the aftermath, automobile business even in areas not hit by flood or wind came to a standstill. Because of today's technology, you can't do business such as processing credit applications without computers. And you can't run computers without electric power or telephone lines. Power was out as far north as Jackson, Miss., and Birmingham, Ala., three days after the storm. Of course, most of Louisiana was blacked out and some areas of the Florida Panhandle still were without power from Hurricane Dennis, a Category Three storm that struck at Navarre Beach on July 10.
Further, communications have been largely blanked by the combination of power and telephone lines down, so even powerful entities like automobile companies and the professionally curious, like reporters, can't find out what is going on. Reliable reports are piecemeal, and sources are swamped.
Toyota, however, was able to tell TCC that it had 21 dealers in Mississippi and Alabama who sustained damage, with five dealerships "devastated;" it had no information on the New Orleans Lexus dealer, and reported Lexus dealers in Baton Rouge, Jackson, Mobile and Birmingham were out of power and thus out of business temporarily even without direct storm damage.
Ford Motor Company was still assessing the situation late Thursday, September 1, but could report that its Ford Credit unit announced a 90-day moratorium on car payments in hurricane areas. The loan contract end dates will simply be extended.
It will be months before all this hash is settled out. Insurance company adjusters will have to give property claims their primary attention, especially that part of a homeowner's policy that provides for extra living expenses when the home is uninhabitable. The largest companies, like State Farm and Allstate, probably have special automotive adjusters, however, who can tend to claims for repairing and replacing vehicles in a timely fashion.
Losses to New Orleans and Mississippi coast auto dealers will run into the multi-millions for facilities and vehicle inventories, but at least they will be able to reclaim revenue through replacing Katrina-lost vehicles. The problem will be how people without jobs can pay for them in the face of other storm costs, because no insurance recoveries will ever blanket 100 percent of the losses.
TCC will bring you more detailed reports on Katrina's dimensions as the facts unfold.
source : thecarconnection
Automotive losses underscore the human ones.
by Mike Davis (2005-09-05)
Despite the satellite monitoring which feeds our minute-by-minute weather reports, Hurricane Katrina became hazardous to theGulf Coast so fast that people and businesses in its path could scarcely act. As in most such catastrophes, the public's and media's focus is first on people, then on destruction of real property and the economy. So the automotive aspects are almost an afterthought.
Katrina struck the Gulf Coast southeast of New Orleans at 6 a.m. on Monday, August 29. On the previous business day, Friday the 26th, the force and direction of the storm was still indefinite. And about 100,000 of them in Louisiana alone decided the danger wasn't imminent enough to evacuate or couldn't physically do so.
Their vehicles were left behind to swim out the storm, along with others, mostly left behind one or more of the family's other sets of wheels. A lot of the left-behinds were rolled up like wads of used Kleenex.
For the most part, businesses like auto dealerships didn't get the word to close until sometime over the weekend. This left a lot of customer cars and trucks in the service departments, or even new models awaiting Monday delivery.
The hurricane thus destroyed tens of thousands if not hundreds of thousands of vehicles in three strokes: first, those directly impacted by winds or surges of water driven by the winds; second, by falling trees and collapsing buildings including garages, and lastly, especially in New Orleans, by flood waters pouring in after the levees broke. I've seen no media reports, but it seems likely some vehicles and their occupants* vanished when countless highway bridges collapsed. These lost vehicles include not only those of private owners, but companies, institutions, governments and automobile dealership inventories.
In the aftermath, automobile business even in areas not hit by flood or wind came to a standstill. Because of today's technology, you can't do business such as processing credit applications without computers. And you can't run computers without electric power or telephone lines. Power was out as far north as Jackson, Miss., and Birmingham, Ala., three days after the storm. Of course, most of Louisiana was blacked out and some areas of the Florida Panhandle still were without power from Hurricane Dennis, a Category Three storm that struck at Navarre Beach on July 10.
Further, communications have been largely blanked by the combination of power and telephone lines down, so even powerful entities like automobile companies and the professionally curious, like reporters, can't find out what is going on. Reliable reports are piecemeal, and sources are swamped.
Toyota, however, was able to tell TCC that it had 21 dealers in Mississippi and Alabama who sustained damage, with five dealerships "devastated;" it had no information on the New Orleans Lexus dealer, and reported Lexus dealers in Baton Rouge, Jackson, Mobile and Birmingham were out of power and thus out of business temporarily even without direct storm damage.
Ford Motor Company was still assessing the situation late Thursday, September 1, but could report that its Ford Credit unit announced a 90-day moratorium on car payments in hurricane areas. The loan contract end dates will simply be extended.
It will be months before all this hash is settled out. Insurance company adjusters will have to give property claims their primary attention, especially that part of a homeowner's policy that provides for extra living expenses when the home is uninhabitable. The largest companies, like State Farm and Allstate, probably have special automotive adjusters, however, who can tend to claims for repairing and replacing vehicles in a timely fashion.
Losses to New Orleans and Mississippi coast auto dealers will run into the multi-millions for facilities and vehicle inventories, but at least they will be able to reclaim revenue through replacing Katrina-lost vehicles. The problem will be how people without jobs can pay for them in the face of other storm costs, because no insurance recoveries will ever blanket 100 percent of the losses.
TCC will bring you more detailed reports on Katrina's dimensions as the facts unfold.
source : thecarconnection
CL Community Team
Joined: Oct 2002
Posts: 30,283
Likes: 363
From: Canada
How One Toyota Dealer Survived Katrina
How One Car Dealer Survived Katrina
Luckily located just to the east of the main path of Hurricane Katrina, the Toyota dealer in Mobile, Ala., nevertheless minimized damage by heeding warnings and working ahead diligently.
"We're open on Sundays," explained Tal Vickers, general manager of Spring Hill Toyota, a couple of miles inland from Mobile Bay. With the path of the Katrina still undetermined - there was always the chance it could swing east or west - on Sunday, August 28, Vickers had his staff move every possible vehicle out of harm's way the day before the full fury of the storm hit. The service department and the showroom were crammed full of new and used cars plus a few customer units. Large vehicles (by Toyota standards) like Highlanders and Land Cruisers were jammed up alongside the showroom's typical large plate glass windows as barriers against the wind. Other vehicles left outside were moved away from light poles and other objects that could be blown down or into them.
As a consequence, Spring Hill suffered damage to only two vehicles, a new Camry, which didn't make it inside the dealership and had a window blown or bashed out, and another car, which in the rush and confusion before the storm was parked with a window still open. To the west along Mississippi's Gulf Coast, most if not all car dealerships may well have been simply obliterated.
As noted in a previous TCC news item, this Toyota dealership along with others in or near the storm path could not operate without electricity. In Spring Hill's case, power was restored on Tuesday night and they reopened on Wednesday morning. Their first three customers bought cars to replace units "under water" from the hurricane.
Spring Hill Toyota's service manager told TCC a flooded car "may be"
salvageable if the waters did not reach the instrument panel. And regardless of the flooding level, a lot would depend on whether the water was highly corrosive Gulf saltwater or fresh water, or worse yet, full of sewage or other contaminants. The insurance adjusters will be busy for a long time. -Mike Davis
source : thecarconnection.com
Luckily located just to the east of the main path of Hurricane Katrina, the Toyota dealer in Mobile, Ala., nevertheless minimized damage by heeding warnings and working ahead diligently.
"We're open on Sundays," explained Tal Vickers, general manager of Spring Hill Toyota, a couple of miles inland from Mobile Bay. With the path of the Katrina still undetermined - there was always the chance it could swing east or west - on Sunday, August 28, Vickers had his staff move every possible vehicle out of harm's way the day before the full fury of the storm hit. The service department and the showroom were crammed full of new and used cars plus a few customer units. Large vehicles (by Toyota standards) like Highlanders and Land Cruisers were jammed up alongside the showroom's typical large plate glass windows as barriers against the wind. Other vehicles left outside were moved away from light poles and other objects that could be blown down or into them.
As a consequence, Spring Hill suffered damage to only two vehicles, a new Camry, which didn't make it inside the dealership and had a window blown or bashed out, and another car, which in the rush and confusion before the storm was parked with a window still open. To the west along Mississippi's Gulf Coast, most if not all car dealerships may well have been simply obliterated.
As noted in a previous TCC news item, this Toyota dealership along with others in or near the storm path could not operate without electricity. In Spring Hill's case, power was restored on Tuesday night and they reopened on Wednesday morning. Their first three customers bought cars to replace units "under water" from the hurricane.
Spring Hill Toyota's service manager told TCC a flooded car "may be"
salvageable if the waters did not reach the instrument panel. And regardless of the flooding level, a lot would depend on whether the water was highly corrosive Gulf saltwater or fresh water, or worse yet, full of sewage or other contaminants. The insurance adjusters will be busy for a long time. -Mike Davis
source : thecarconnection.com
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