Chrysler moves to eliminate 789 dealers

May 14, 2009 8:20:44 PM PDT
Chrysler LLC wants to eliminate roughly a quarter of its 3,200 U.S. dealerships by early next month, saying in a bankruptcy court filing Thursday that the network is antiquated and has too many stores competing with each other. RELATED: See the list of dealerships to be closed.

Local Impact: See the names of local dealerships that are on the list to be closed.

The company, in a motion filed with the U.S. Bankruptcy Court in New York, said it wants to shed 789 dealerships by June 9. Many of the dealers' sales are too low, the automaker said, with just over 50 percent of dealers accounting for about 90 percent of the company's U.S. sales.

Dealers were told Thursday morning through United Parcel Service letters if they would remain or be eliminated. The cuts are likely to devastate cities and towns across the country as thousands of jobs are lost and taxes are not paid.

Chrysler Vice Chairman Jim Press called the cuts difficult but necessary. He said the list of dealers is final and there will be no appeal process.

"This is a difficult day for us and not a day anybody can be prepared for," Press told reporters during a conference call.

A hearing is scheduled for June 3 in U.S. Bankruptcy Court in New York for the judge to determine whether to approve Chrysler's motion. Judges often rely on companies in bankruptcy to help determine what is in their best business interest, such as the closure of dealerships or cancellation of contracts.

Chrysler executives said the company is trying to preserve its best-performing dealers and eliminate ones with the weakest sales. More than half of the dealerships being eliminated sell less than 100 vehicles per year, they said, and account for 14 percent of U.S. sales.

The company is also trying to reduce the number of single-brand dealerships to bring all three Chrysler brands - Jeep, Chrysler and Dodge - under a single roof, they said. It also wanted to limit competing dealerships.

"We recognize in the short term we will see some loss of sales," Press said. "But based on the long term ... the dealer (network) is key and it's going to be very strong, powerful, with a much better financial viability."

The 3.5 million customers who purchased vehicles from the affected dealers will be notified about the closures and their warranties will still be honored, said Vice President Steven Landry.

Don Burk, co-owner of Heritage Chrysler Jeep in Ozark, Mo., said he found out that Chrysler plans to get rid of his dealership when he opened his UPS letter Thursday morning.

"Right now I'm processing the information," he said shortly after reading the letter. "I'm sure I'm going to get with my partner and we'll decide what to do from here."

The dealership, in a city of about 10,000 near Springfield, Mo., is involved in the community, sponsoring sports teams and even buying championship rings for the Ozark High School girls basketball team when it won the state championship several years ago, Burk said.

"If you're a good-sized business, kind of by default you're involved a lot," he said.

Chrysler dealerships aren't the only ones scheduled to get bad news this week. General Motors Corp. says it is notifying 1,100 dealers that it will not renew their franchise agreements when they expire at the end of September of 2010.

In its motion, Chrysler said it has many dealerships that sell one or two of its brands, with Chrysler-Jeep dealerships competing against Dodge dealers as well as other automakers' stores across the country.

"We understand there's going to be a consolidation of dealers, said John McEleney, a Clinton, Iowa, auto dealer who serves as chairman of the National Automobile Dealers Association. "We just think the process needs to be slowed down."

He said about 187,000 jobs could be lost from the closing of GM and Chrysler dealerships.

Even for dealers that were not included on the list, Thursday's news was not easy to handle.

"It's heart-wrenching," said Chuck Eddy, a Youngstown, Ohio, Chrysler dealer that was not cut. "I've grown up in this business. My dad's been with Chrysler since '57. I've grown up with a lot of these families. That's all I've ever known - Chrysler."

Chrysler said in its filing that dealers are not competitive enough with foreign brands. Chrysler sold an average of 303 vehicles per dealer in 2008, according to its filing. By contrast, Honda Motor Co. sold about 1,200 vehicles per dealer, while Toyota Motor Corp. sold nearly 1,300 per dealer.

Chrysler said its dealer network "needs to be reduced and reconfigured in a targeted manner to strengthen the network and dealer profitability and to achieve optimal results for the dealers and consumers."

Chrysler has received $4 billion in federal loans and has been operating in bankruptcy protection since April 30. Its sales this year are down 46 percent compared with the first four months of last year and it reported a $16.8 billion net loss for 2008.

Dealerships in PA, NJ, & DE, listed to be closed.

KEY: D - Dodge/ T - Dodge Truck / J - Jeep / C - Chrysler

PA

BERGEY'S INC DBA BERGEY'S DODGE 44755 DT 1201 N BROAD ST LANSDALE, PA 19446

BURGUNDER MOTORS INC 3000 WASHINGTON PIKE 56634 DT BRIDGEVILLE, PA 15017

BY FISHEL'S JEEPS INC DBA FISHEL CHRYSLER JEEP 23190 JC 2980 CAPE HORN ROAD RED LION, PA 17356

CENTURY III DODGE INC 911 CLAIRTON BLVD RT 51 42833 DT PLEASANT HILLS, PA 15236

CUNNINGHAM CHRYSLER JEEP, INC. DBA CUNNINGHAM CHRYSLER JEEP, INC. 64723 CJ 85 WEST MAIN ST NORTH EAST, PA 16428-1194

DET AUTOMOTIVE GROUP, INC. DBA GEGNAS CHRYSLER JEEP 62824 CJ 3875 KENSINGTON AVENUE PHILADELPHIA, PA 19124-5689

FAIRVIEW CHRYSLER JEEP INC 7589 WEST RIDGE RD 8711 CJ FAIRVIEW, PA 16415-1016

H E WAGNER MOTOR SALES CO 76 VALLEY PIKE 54231 DT JOHNSTOWN, PA 15905-4191

HONDRU CHRYSLER, INC. DBA HONDRU CHRYSLER, INC. 67813 C 700 LANCASTER RD MANHEIM, PA 17545

I M JARRETT & SON INC 335 S YORK ROAD 57987 DT HATBORO, PA 19040-3494

JAMES W HALTERMAN INCORPORATED DBA HALTERMAN'S AUTO RANCH 23230 J 400 ANALOMINK RD, ROUTE 447 EAST STROUDSBURG, PA 18301

JJ FLYNN, INC. DBA JOHN FLYNN CHRYSLER JEEP 60356 CJ 6225 RIDGE AVE PHILADELPHIA, PA 19128-2630

KEYSTONE DODGE INC 2350 LEHIGH ST 41281 DT ALLENTOWN, PA 18103-4703

MELCHIORRE INCORPORATED DBA WARNER CHRYSLER-JEEP 68119 CJ 1475 MANHEIM PIKE LANCASTER, PA 17601

ROTHROCK MOTOR SALES INC DBA ROTHROCK CHRYSLER 67274 C 1648 PLAZA LANE ALLENTOWN, PA 18104

RVR INC DBA R & R AUTO GROUP 26694 J 388 ROUTE 61 SOUTH SCHUYLKILL HAVEN, PA 17972

SAYLOR MOTOR CO INC 301 N CENTER AVE 56006 DT SOMERSET, PA 15501-1429 SCOTT CHEVROLET INC DBA SCOTT CHRYSLER 67023 C 2120 33RD STREET ALLENTOWN, PA 18103-7008

SHOEMAKER'S JEEP INC 4131 WALBERT AVENUE 23178 J ALLENTOWN, PA 18104-1626

TOM MASANO CHRYSLER JEEP, INC. DBA TOM MASANO CHRYSLER JEEP, INC. 64103 CJ 1600 LANCASTER AVEN READING, PA 19607-1597

YOUNG VOLKESWAGEN INC DBA YOUNG DODGE 42507 DT 191 COMMERCE PARK DRIVE EASTON, PA 18045

NJ

23 AUTO GROUP, LLC DBA 23 DODGE 45262 DT 1567 STATE RT 23 BUTLER, NJ 07405-1820

BERLIN CHRYSLER INC 94 W WHITE HORSE PIKE 65052 C BERLIN, NJ 08009-1290

BURKE BROTHERS INC 519 STONE HARBOR BOULEVARD 68096 CJ CAPE MAY COURT HOUSE, NJ 08210-2417

COLEMAN AUTO GROUP, INC. DBA COLEMAN JEEP 26424 J 1710 N OLDEN AVE TRENTON, NJ 08638-3102

CONTI CAUSEWAY FORD DBA CAUSEWAY JEEP 26540 J ROUTE 72 EAST MANAHAWKIN, NJ 08050-3391

DODGE OF ENGLEWOOD INC DBA GRAND DODGE OF ENGLEWOOD 44470 DT 60 ROCKWOOD PLACE ENGLEWOOD, NJ 07631-4938

FOULKE MANAGEMENT CORP DBA CHERRY HILL JEEP 26576 J 1708 WEST MARLTON PIKE CHERRY HILL, NJ 8002

HAMILTON CHRYSLER INC 1240 HIWAY 33 64980 C HAMILTON SQUARE, NJ 08690

LENIHAN JEEP, INC. DBA LENIHAN JEEP 23185 J ROUTE 73 SOUTH MARLTON, NJ 08053

MALL CHRYSLER INC 587 ROUTE 38 67676 C MAPLE SHADE, NJ 08052

MAURO MOTORS INC 611 AMBOY AVE 5977 C WOODBRIDGE, NJ 07095-3048

WAYNE DODGE INC DBA WAYNE DODGE 52741 DT 777 MOUNTAINVIEW BLVD WAYNE, NJ 07470

DE

C F SCHWARTZ MOTOR CO INC 1536 N DUPONT HWY 8789 C DOVER, DE 19901

HERTCO INCORPORATED DBA HERTRICH JEEP 26482 J 1378 S DUPONT HWY DOVER, DE 19901-4404

NEWARK DODGE INC 250 ELKTON ROAD 44591 DT NEWARK, DE 19711

RELATED: See the entire list of all the dealerships closing in Pennsylvania, New Jersey, Delaware, and the entire country.

Morey money-related links:

Follow Action News on Twitter

Get Action News on your website

Follow Action News on Facebook

Click here to get the latest Philadelphia news and headlines from across the Delaware and Lehigh valleys.


Load Comments