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Saturday, May 16, 2009

Chrysler Plans to Shut 1 in 4 of Its U.S. Dealers

Nearly 800 dealers were given notice that they would be cut off next month
By Bill Vlasic and Nick Bunkley
New York Times

The historic downsizing of the American auto industry swept through new-car showrooms on Thursday, as dealers across the country, from Fuller Jeep in Rockland, Me., to Island Dodge in Hawaii, learned that they would be forced to close their doors.

In all, nearly 800 dealers selling various Chrysler brands were given notice Thursday that they would be cut off next month. Meanwhile, General Motors is preparing to close up to 2,600 more of its dealers by next year.

Dealers like Ward Drennen, who runs the business his great-grandfather opened 101 years ago near Birmingham, Ala., learned of their fate in letters delivered Thursday morning by U.P.S.
“I had a small crowd around me when I opened it, all hoping for the best,” said Mr. Drennen, who took over ownership of Don Drennen Chrysler Jeep from his ailing father only a few days ago.

“We were shocked,” he said. “We’ve been in Birmingham for almost as long as Birmingham has been here, and selling cars for almost as long as they’ve been building them.”

The National Automobile Dealers Association has estimated that all the dealership closings, including ones already announced by G.M. and Chrysler, represent 187,000 jobs, more than the number of people who work for the two car companies in the United States.

“Even though we knew it was coming, it’s still a shock to see those names in black and white,” said John McEleney, chairman of the dealers association.

The unprecedented closings reflect the precarious financial state of both G.M. and Chrysler, which have been subsisting on government loans since the beginning of the year.

See: Go to Article from The New York Times »

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