GM dealers seen able to weather short-term strike

By Nick Carey

DETROIT (Reuters) - General Motors Corp dealers said on Monday the United Auto Workers strike should have little short-term impact on showroom sales since inventories of most vehicles were running high before the work stoppage.

"GM inventories are such that we don't expect any short-term disruption," said Marc Cannon, a spokesman for Fort Lauderdale, Florida-based AutoNation Inc, the largest GM dealer in the United States, with 72 franchises in 16 states.

"We have ample inventory to satisfy the near-term needs of our customers," he said.

The UAW called a strike against the top U.S. automaker on Monday after the two sides failed to reach a contract agreement.

Peter DeLongchamps, vice president for manufacturing and communications at Houston-based Group 1 Automotive Inc, said with inventories on GM vehicles running at between 70 and 100 days, "We have vehicle availability to weather a shutdown for 45 to 60 days at least."

A longer strike would concern dealers, said Paul Taylor, chief economist for the McLean, Virginia-based National Automobiles Dealers Association, which represents 93 percent of all U.S. auto dealers.

"Our members are hopeful that this will be over soon," Taylor said. "This is a reasonable expectation as both sides have an interest in reaching a deal quickly."

In a research note, Lehman Brothers analyst Brian Johnson wrote that since GM had needed to cut production by about 15 days, a two-week strike could be "actually, ironically, a lower cost way to adjust inventory."

However, some analysts warned that inventories on some of GM's more popular crossover models -- more fuel efficient versions of the sports utility vehicles that have fallen out of favor with American consumers -- are relatively low.

Models in that segment include the new Buick Enclave and the GMC Acadia.

"GM has had some sales momentum in specific segments, and shoppers interested in those vehicles may have a harder time finding what they want at last week's prices," Edmunds' auto tracking Web site AutoObserver.com said in a research note.

Despite plenty of inventory, dealers said they want the strike to end as soon as possible.

"Short and sweet, that's how I'd like to see it happen," said Tom Waldecker of Waldecker Chevrolet in Fowlerville, Michigan.

(Additional reporting by David Bailey, editing by Jeffrey Benkoe)