Automakers, dealers assess Harvey destruction in Texas

Several dealerships in Texas have been flooded and likely hundreds more have suffered damage to buildings and inventory, as the automobile industry continues to assess the destruction from Hurricane Harvey.

The storm has brought record amounts of rainfall and massive flooding to the Houston area since Friday. Economists say Harvey will leave billions of dollars in damage behind. In addition to being a major energy hub, Texas is among the top U.S. markets for auto sales, particularly pickup trucks and SUVs. Early reports indicate significant damage to automobile dealerships in the southeastern portion of the state.

Aransas Autoplex in the coastal town of Port Aransas was demolished, according to Bill Wolters, president of the Texas Automobile Dealers Association. General Motors (NYSE:GM), Ford (NYSE:F) and Kia dealers in Dickinson and Cleveland, Texas, were completely flooded. Wolters estimates that Harvey affected 400 dealerships in some way. With the storm still hovering over the area and new evacuation orders issued Monday, it remains a “wait and see situation,” he said.

Dealers who reported no damage to their stores or inventory still can’t open their business because most employees and customers can’t travel. About 30,000 employees work in those 400 dealerships.

“We are getting very preliminary reports, and it will be some time [before] the final damage is assessed,” Wolters wrote in an email to FOX Business. “No human casualties in the dealership community have been reported, so that is a major blessing.”

Ford said it knows “for certain” that many of its dealers in southeast Texas “sustained significant damage.”

“On behalf of Ford Motor Company, our thoughts and prayers go out to all of those impacted by this devastating storm,” the company said. “We are gathering information from local authorities and dealers so we can offer our assistance in the most effective way possible.”

AutoNation (NYSE:AN), the nation's largest dealership chain, closed 18 stores and seven collision centers Monday. Its Houston locations will remain closed Tuesday.

“At this point we continue to assess the situation and continue to focus on our employees’ safety,” an AutoNation spokesperson said.

Dealers across the region that rely on import shipments could see delays. The ports of Houston and Galveston were closed as Harvey made its way toward the coastline late last week, and they will remain closed Tuesday. Automakers such as Fiat Chrysler Automobiles (NYSE:FCAU) ship thousands of vehicles through the Port of Houston each year.

Railroads that carry vehicles from Mexican plants to the U.S. also reported disruptions. Union Pacific (NYSE:UNP) operations along the Gulf Coast from Brownsville, Texas, to Lake Charles, La., remained suspended late Monday. Kansas City Southern (NYSE:KCS), which stopped trains from running between Kendleton and Laredo, Texas, said there had been little opportunity to assess the status of its rail network, according to a status alert on its website.

Harvey isn't expected to create any production issues. GM, which operates a plant in Arlington where it builds large SUVs like the Chevrolet Tahoe, said it hasn't experienced any impact to production as a result of the storm. All GM employees in southern Texas are accounted for and safe.

“We are closely monitoring the storm and its continued impact on our Texas employees and their families, facilities, dealers, suppliers and customers,” GM said.