Route to Recovery

A trip through the epicenters of the recession

Toyota dealer weathering the storm, worrying about commercial lending

Nov 16, 2009 17:06 UTC

ROUTE-RECOVERY/

BIRMINGHAM, Alabama – It is not an easy time to be an auto dealer. Apart from worrying about when sales will revive, and at what level, Bruce Limbaugh’s biggest worry is access to loans.

“This is a major challenge for our industry,” said the owner of Limbaugh Toyota. “Even more than credit for consumers, I am concerned about the lack of commercial lending for dealers. Local and regional banks in particular are spurning our dealers.”

Limbaugh’s father bought the Toyota dealership that he now runs back in 1989 and sold it to him in 1995. Like the rest of the U.S. auto industry, Limbaugh Toyota has been hurt by a combination of the recession, the U.S. housing crisis and the credit crunch. So far this year new car sales at the dealership are down 22.6 percent. The industry as a whole has seen U.S. sales fall from a peak of 17 million units in 2005 to an estimated level of just over 10 million units in 2009.

“For us, this truly is a Great Recession,” Limbaugh said. “My net worth has been cut in half over the last year.”

That said, Limbaugh said that last month was the dealership’s second most profitable October in 20 years, and that sales were actually up over October 2008.

“Every month since February our bottom line has improved,” he said.

ROUTE-RECOVERY/

Over the past year Limbaugh has cut his staff to 67 from 75. He would “rather not cut that anymore. But the market will dictate that.”

Long term, he believes the auto industry and sales will turn around for what for him is truly a family business. He has three sons and a son-in-law working at his dealership and another son-in-law owns the advertising agency that handles his marketing.

Photo by Carlos Barria

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“Do I think we will recover? Absolutely,” he said. “I’m banking my family’s future on it.”

COMMENT

and this was all before their cars starting speeding up and driving through buildings lol… The crazy part is their always rated number #1.

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Introducing the Route to Recovery

Reuters Staff
Oct 28, 2009 17:13 UTC

A woman wears a "Keep it Made in America" pin as she participates in a labour activists march in Lansing, Michigan June 1, 2009. REUTERS/Mark Blinch

It would be an understatement to say America has had a tough time lately. After many heady boom years, the bursting of America’s housing bubble led to the near meltdown of the global financial system and the longest, deepest recession since the 1930s.

The downturn some have called the Great Recession began in December 2007 and may already be ending. But U.S. unemployment stands at nearly 10 percent, and much of the economy’s growth has been fueled by government spending in programs like Cash for Clunkers and the first-time home buyer’s credit.

The trillion-dollar question for America is whether the growth of the past quarter is sustainable. Reuters will be attempting to find out this month, in a cross-country trip through the epicenters of the recession and the recovery. Reporter Nick Carey, photographers Brian Snyder, Lucy Nicholson and Carlos Barria, and Reuters TV producer Sharon Reich will be on the road for three weeks starting on Nov 3.

From El Centro, California, with the highest unemployment rate in the country, to Austin, Texas, which has been hit comparatively lightly by the recession, the team will seek out answers at the ground level.

  • How have ordinary Americans fared through this long downturn and what are their hopes and fears as the grim year of 2009 drags slowly toward its close?
  • How are everyday people faring in Bentonville, Arkansas, home of the behemoth retailer Wal-Mart, which has thrived as Americans look to cut household spending?
  • What happened to the dreams of retirees who bought homes during the boom in Bullhead City, Arizona?
  • Do shrimp fishermen in Alabama have anything in common with out-of-work bankers in Charlotte, North Carolina?

You can follow the team’s travels on our Route to Recovery page, with an interactive map featuring news, pictures and video from the towns they visit.

Nick, Brian, Lucy, Carlos and Sharon will also be filing updates from Twitter. You can send us your own questions and comments using the Twitter hashtag #routetorecovery, or by clicking “Add a Comment” in the live blog window.

Do you live in one of the towns we’re visiting? We want to hear from you.

COMMENT

Commercial realestate has crashed in arizona my house was in an excellent location.Not now.You cant even give away downtown prime central phoenix realestate.The vultures are everywhere wanting something for nothing.The government should have let the too big to fail banks fail.Im losing my home and they have no real help.I didnt even pay much for my home but will lose it.I got a home loan modification which is reported negatively on my credit.But no help on horizon to consolidate my loans to survive.ITS EITHER GONNA SELL OR ITS GOING TO THE AUCTION SO BOTH BANKS CAN SHARE IN MY JOY!

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