Chrysler moves to eliminate 789 dealers

Chrysler moves to eliminate 50 Texas dealers

By LINDA STEWART BALL Associated Press Writer© 2009 The Associated Press

May 14, 2009, 5:45PM

DALLAS — Ed Green never dreamed his family's ties with Chrysler might end so abruptly.

His grandfather started selling the cars more than 70 years ago. So Green was more than a little surprised Thursday to learn the family's dealership on Corpus Christi's fringe was among the 789 U.S. dealerships Chrysler LLC wants to close.

"In the American Dream you're supposed to have the chance to succeed," Green said. "Yet we don't get a chance to go forward because they decided they needed someone bigger and prettier than we are."

"It's a form of discrimination," Green added. "It's a shame."

E.H. Green Motors Inc., in Odem is one of 50 dealerships in Texas that Chrysler is targeting for elimination by June 9. The automaker plans to shut down more dealerships in Texas than in any other state, according to a bankruptcy court filing in New York on Thursday.

The Detroit automaker said that sales of many of the targeted dealers are too low, and that its network is outdated and has too many stores competing with each other.

On Thursday, dealers received letters from Chrysler stating whether they would remain or be closed.

Green, whose grandfather started selling Chrysler products in 1936, said they have satisfied customers, they're profitable and consistently outsell larger Chrysler dealers.

"But they're getting to stay and we aren't," Green said, adding that there wouldn't be another dealer from Victoria to Corpus Christi — a distance of about 80 miles — if they close.

He said during Chrysler's difficult days, his dealership stepped up and bought more inventory than they normally would and now they're stuck with it.

"Being here so many years and being that loyal to Chrysler, it certainly wasn't reciprocated," Green said.

Although dealers can appeal, Green said he wouldn't stand a chance before a New York judge alone.

He's considering joining an alliance of the National Auto Dealers Association that can better leverage the concerns of the 789 dealerships to be terminated.

Green said his dealership sold at least 300 cars last year.

That puts him within the average number of vehicles sold per Chrysler dealer in 2008, according to the automaker's filing.

Honda Motor Co., in comparison, sold about 1,200 vehicles per dealer. Toyota Motor Corp. sold nearly 1,300 per dealer.

Seaton Higginbotham, co-owner of Arrow Chrysler Jeep in Abilene, which sells about 30 vehicles a month, said he's joined the national group of rejected dealers seeking justice in court.

"We're mad!" Higginbotham said. "We didn't see it coming."

A Dodge dealership will remain in Abilene and Higginbotham said Chrysler probably wants to give his business to it.

"We don't feel it's fair but fairness doesn't always win out in bankruptcy," Higginbotham said. "It's disheartening."

"The automotive industry is taking on the chin a lot of the repercussions of the mortgage and banking problems," Higginbotham said. "They're Wall Street. We're Main Street. We're where the rubber meets the road."

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.

A hearing is scheduled for June 3 in U.S. Bankruptcy Court in New York to determine whether to approve Chrysler's motion.

If approved, the move is expected to devastate some communities across the state and nation as thousands of jobs are lost and taxes go unpaid.

Russell Whatley III in Mineral Wells said Chrysler might not want to do business with his family's dealership anymore but that doesn't mean they're calling it quits after 90 years in business.

Russell Whatley Motors Co., which claims to be the oldest car dealership in Texas, said Thursday they're not yet sure what being targeted for elimination will really mean.

"It doesn't mean anything to us yet," Whatley told the Mineral Wells Index. "We are independent and debt free. I don't care what they do, to tell you the truth. I'll know more in a few days."

The local dealership carries new Dodge cars and trucks, Jeeps and Chrysler products from its downtown business location and operates a used car lot.

In its motion, Chrysler said that as suburbs grew and the interstate system evolved, long-standing dealerships were no longer in the best or growing locations.

"Some dealership facilities became outdated," the company said in its filing. "Other locations faced declining traffic count and declining populations."

Chrysler said its dealer network needs to be reduced to strengthen its network and make the remaining dealers more profitable.

Chrysler, which has 3,200 U.S. dealerships, been under bankruptcy protection since April 30 and has received $4 billion in federal loans.

Its sales are down 46 percent this year compared with the first four months of last year. It reported a $16.8 billion net loss for 2008.