Kelly refocuses as GM brands move

Kelly refocuses as GM brands move

April 12th, 2010 by Ellis Smith in News

Staff Photo by Jake Daniels/Chattanooga Times Free Press A Cadillac Escalade sits at the edge of the Kelly Mitsubishi Subaru lot on Sunday afternoon. The auto dealer is withdrawing Cadillac and GMC components from its service and parts facilities.

Staff Photo by Jake Daniels/Chattanooga Times Free Press...

The Cadillac and GMC franchises in Chattanooga held by Kelly Auto Group will shift to the owner of the local Saturn dealership as Kelly refocuses on its import auto lines.

The Kelly Auto Group today announced that it has settled with General Motors for an undisclosed sum and no longer will pursue congressionally mandated arbitration to retain the Cadillac and GMC franchises.

As part of the agreement, dealership owner Tim Kelly said he is relocating his Brainerd Road Infiniti dealership and has sold the Cadillac and GMC related assets to Saturn of Chattanooga owner Brent Morgan.

"We've essentially signed a settlement with General Motors and signed a purchase agreement with Brent Morgan," Mr. Kelly said. "We're parting ways with General Motors, and Brent Morgan is going to become the area GM dealer."

The new home for GMC, Cadillac and Saturn will be named Integrity Automotive Group, according to Mr. Morgan, and will be based at his current Saturn of Chattanooga site that overlooks Highway 153 near Shallowford Road.

"Our team is really pleased that we've been able to acquire the Cadillac and GMC franchises," Mr. Morgan said. "This is a positive thing for Chattanooga because Kelly can transition the imports to work better for him and we can transition on the domestic side and expand our operations."

Mr. Morgan plans to hire an additional 15 employees, he said, and wants to get moving quickly on the change.

"We will be fully operational in the next week to 10 days," he said. "People will see things changing during that time."

He said recent positive sales and financial news from Detroit have given him encouragement that the GM brand has the staying power to make it in Chattanooga.

"I wouldn't be making an investment in these brands if I didn't think there was a bright future," he said.

Integrity Automotive Group

* Based at Saturn of Chattanooga on International Drive

* Will service and sell Saturn, GMC and Cadillac brands

Kelly Auto Group

* Infiniti on Brainerd Road to close

* Will no longer sell GMC and Cadillac brands

* Chapman Road site to sell and service Infiniti, Subaru and Mitsubishi

* Downtown store to sell and service Saab and used cars, and will offer body shop and independent service on all other vehicles. It also will service Hummers.

Mr. Kelly said he is closing the Brainerd Road location of his Infiniti dealership, but his remaining two stores on Riverfront Parkway and Chapman Road will stay open. He will continue to sell and service his remaining brands, including Subaru, Mitsubishi, Infiniti and Saab. He also will continue to service Hummer downtown.

"The only location that will be closing is the Infiniti location out by the airport," Mr. Kelly said. "Downtown will remain open, Saab will go down there and we'll be opening an independent service center down there to service all brands."

He said the Chapman Road site will sell and service Infiniti, Subaru and Mitsubishi brands, while the downtown site will sell and service Saab vehicles and used cars, as well as offer body shop and independent service for all other brands.

"We're very optimistic about our remaining brands and feel that this option allows us to focus on the best opportunities for the future," Mr. Kelly said. "I'm not particularly sanguine about GM's future, and therefore think this is the best choice for our company."

Herb Adcox Chevrolet, another longtime Chattanooga dealership, and Don Ledford Automotive in Cleveland, Tenn., a dealer for Buick, GMC and Cadillac brands, previously have said they were pursuing arbitration with GM.

Mountain View Chevrolet is another GM dealership that operates on 20th Street near downtown Chattanooga. It is the successor to the Newton Chevrolet dealership.

Continue reading by following these links to related stories:

Article: Local GM dealers face franchise fight

Article: Chattanooga: Sputtering brands face axe