Chrysler dealers say ’a lot of America is dying’

Agence France-Presse

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Woody Burriss took it hard when he learned that the car dealership he has worked for three-quarters of his life was being dropped by Chrysler.

"The whole weekend I was thinking, 'If it closed down what would I do?'" 73-year-old Burriss told Agence France-Presse as he washed and polished a customer's car at Montrose Dodge in this outlying suburb of Washington.

"It's not that a bit of America is dying with this, a lot of America is dying," said Burriss, who has worked at the family-run dealership since 1954, when he was 19 and fresh out of high school.

Two weeks ago, Montrose Dodge owner Rick Shaub was told by Chrysler that the dealership founded by his grandfather in 1945 was one of nearly 800 being given the chop by the ailing U.S. auto maker.

"We are filing a motion in bankruptcy court rejecting the sales and service agreement(s) between Chrysler Motors and the dealership listed above," Chrysler said in a form letter dated May 13, which was sent to Shaub by overnight special delivery. "Your agreement will be rejected on or about June 9," the impersonal letter said.

That gave Shaub roughly three weeks to wind down the mainstay of the family business -- selling and providing warranty service for new Dodge cars - to which he, his father and grandfather had collectively devoted 125 years of their lives, he told AFP.

As the United States grappled with the worst economic downturn since the Great Depression in the 1930s, Chrysler in mid-May asked a bankruptcy court judge to shut down 789 dealers, or a quarter of its sales outlets, to help cut costs and boost the odds for the success of an alliance with Italy's Fiat.

Dismissing the troops

The head of the Washington Area New Automobile Dealers' Association, or WANADA, said the move was "like dismissing the troops while the enemy is at the gate." "Auto makers don't sell vehicles without dealers. This is a bad move," WANADA chief executive Gerry Murphy told AFP.

Shaub, too, was baffled by the move. "No one's said to us how cutting dealers can make the manufacturer more financially viable," he said, explaining that dealers pay slightly less than sticker price for a new Chrysler, Jeep or Dodge, and then pay interest to Chrysler on a vehicle for every day that it sits on the showroom floor.

"I have to wait until it gets sold before I get my money, but Chrysler gets paid up front," said Shaub, adding that the shuttering of dealerships would have a "trickle-down" effect on communities. "There's a kid almost everywhere within a 10-mile range that has our name on their T-shirt. We'll definitely have to cut back on things like sponsorship of kids' soccer or baseball under this new scenario," said Shaub.

Jobs would be cut, and not only in the dealerships but also beyond the showroom and workshop.

"You just have to watch the trucks coming in and going out of my lot every day," said Shaub. "The guy who fixes upholstery, the guy who repairs the glass ... a myriad of people will be affected."

Jack Fitzgerald, president of Fitzgerald Auto Malls, said Chrysler's "foolishness" could put upwards of 150,000 people around the United States out of work and slammed the carmaker's executives for punishing dealers while it was they, the bosses in Detroit, who had mismanaged the company.

"I pay my bills, I do all the things you're supposed to do and yet some jerk in Detroit ... decides I'm an under-performing dealer?" said Fitzgerald. "Well, he's an under-performing manufacturer. He's last in consumer report ratings. The only reason General Motors isn't last is because Chrysler is."

General Motors has until June 1 to present a US government task force with a viability plan or see federal aid cut off. It is widely expected to follow Chrysler into bankruptcy and use a similar plan to its rival's to emerge more streamlined and competitive.

Like Chrysler, GM has announced that it will close thousands of dealerships, although it has given them time to wind down their business. "The GM dealers, they've told them they've got until October 2010 to sell their cars," said Shaub. "I'd love that."