Chrysler dealers see silver lining
Chrysler dealers have been through the wringer before, and although Chrysler’s bankruptcy on Thursday has many worried about a sales slide, most are staying optimistic.
“This is completely uncharted territory, and there are still so many unknowns,” said John Sackrison, executive director of the Orange County Automobile Dealers Assn. “Bankruptcy is not the preferred option, but each day we’re learning a little bit more, and the dealers will come out stronger on the other side of this.”
In West Los Angeles on Thursday, Jim Buerge met with staff members at his Buerge Chrysler Jeep dealership to quell their concerns. He was initially worried about his dealership’s fate because his sales volume has plunged 50% since August, but said he was reassured that the business was safe.
Now he’s hoping that the government’s show of faith in Chrysler compels consumers to buy more American cars. He said he’s looking forward to the combined buying power of a merged Chrysler Financial and GMAC.
And as for President Obama’s involvement: “What better backing could you have?” he asked.
“The dark cloud over our heads is moving away from us,” he said. “At least there’s some plan in effect to correct the issues at hand. I feel a lot better today than I did yesterday.”
Some dealers worried that the constant bad news swirling around the automobile industry might make potential buyers skittish.
Sales of new Chryslers in Orange County for the first three months of the year dropped nearly 47% compared with the same period in 2008, Sackrison said. Overall new-car sales in the U.S. slipped 36% in the first quarter compared with the year-earlier period.
But Doug Swaim, general manager at Star Chrysler Jeep in Glendale, was relatively unruffled. He predicted that Chrysler would emerge from bankruptcy leaner, but also more viable.
“It’s like when there’s a warning light on a customer’s dashboard, and because they don’t know what it means, they get a little nervous when it’s usually something minor and insignificant,” he said. “It’s all for the better to get the mysteries and question marks behind us.”
And as long as Orange Coast Chrysler Jeep Dodge in Costa Mesa keeps running smoothly, owner Jon Gray said he would be satisfied.
“The bankruptcy has more to do with assets and liabilities and balance sheets at Chrysler than it has to do with the day-to-day operations,” he said. “There should be zero impact where it really matters, and that’s out in the community.”
Several dealers said they believed Chrysler had filed for Chapter 11 bankruptcy protection to better position itself for future growth, although Swaim also blamed smaller lenders and creditors for being unwilling to negotiate.
The deal with Italian automaker Fiat, also announced Thursday, is another ray of hope for a stable future, Buerge said. The partnership to build cars will help create jobs, he said, and provide critical technology for smaller Chrysler vehicles that will boost Chrysler’s standing when gas prices inevitably creep up again.
Many dealers said that any remaining fear and skepticism were dispelled during an afternoon conference call that Chrysler executives made to more than 3,000 of their peers.
The tone was upbeat, several said, and the call touched candidly on timelines, government-backed warranties and the possible cutting and consolidation of dealers.
“We’ve all been zigging and zagging these last few months, but now we’re talking about facts,” Gray said. “Everybody has a bounce in their step now. It’s a good day to be a Chrysler dealer.”
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