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Some survive, some die as Chrysler closes shops to weather recession
by Jonathan Cribbs
jonathan@dekalbchamp.com
Darryl Ford said he did everything he could to ensure his Stone Mountain Chrysler dealership wasn’t shut down May 14. He hit all the marks. Over the last year, he’s downsized from 75 employees to 58. He’s cut monthly expenses by about $150,000 or 25 percent. He’s cut back on advertising.
Regardless, as Chrysler was poised to announce a shutdown of hundreds of dealerships nationwide, Ford said his shop was nervous.
“I think every dealer in the country was,” he said. “You didn’t know what [criteria the company was considering].”
As it turns out, Ford and his dealership on Highway 78 are safe.
Chrysler wants to eliminate roughly a quarter of its 3,200 U.S. dealerships by early next month, saying in a bankruptcy court filing May 14 that the network is antiquated and has too many stores competing with each other.
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 more than 50 percent of dealers accounting for about 90 percent of the company’s U.S. sales.
Dealers were told May 14 through United Parcel Service letters whether 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 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 fewer 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.
Chrysler announced the closure of 32 dealers throughout the metro Atlanta area. The only DeKalb County dealership to be closed was on Church Street in Decatur: Premier Chrysler Jeep Dodge. The dealer’s general manager, Tafi Jaji, said he’s fighting the closure. The dealership was forced to shut down in November after Bank of America stopped lending as the recession deepened and credit dried up, Jaji said.
Jaji wasn’t able to reopen the store until February and had to rehire a staff of 110 people.
All of them lost their jobs May 14, he said.
“It really took us aback,” Jaji said. “Now that we’re back in the swing of things, Chrysler’s made the decision that they couldn’t wait on us to get back to things.”
His dealership was among the top five in sales volume in the Atlanta area and in the top 5 percent nationwide, he said.
“We have absolutely no desire to close this store,” he said.
Back in Stone Mountain, Ford said he’s optimistic about his dealership’s prospects, particularly in light of Chrysler’s pending partnership with Italian automaker Fiat.
“They’re an excellent car company,” he said. “Sales are already picking up. Already this month we’ve seen it.”
Chrysler’s announcement came just a day before the General Motors Corp. told more than 1,000 dealerships nationwide that their contracts would not be renewed at the end of the year. The company did not make its list public, however.
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