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Meir Rinde

 

Mercer Chrysler dealerships cope with loss

 

By Meir Rinde

Staff Writer

May 24, 2009

 

EWING — With Chrysler expected to announce bad news at any moment earlier this month, dealership owner Bruce Coleman wasn’t sure whether to head to Florida for a wedding.

He made the trip, but during a stopover at the Atlanta airport he checked his cell phone and heard a very brief message from his business partner, Bill Kendall.

“‘We lost both stores,’ is all he said,” Coleman recalled this week.

Sitting in the office of his Jeep-Subaru-Kia dealership on North Olden Avenue in Ewing, he paused, fighting back tears.

“Excuse me one second,” he said. “You can probably tell how emotional it is. Thirty-two years of your life, right down the drain.”

As Coleman and 788 other dealers nationwide learned, Chrysler had sent letters on May 14 saying it was cutting off their supplies of new cars as it goes through bankruptcy proceedings and seeks to consolidate its dealer network.

“The unprecedented decline in the industry has had a significant impact on our sales and forced us to reduce production levels to better match the needs of the market,” Chrysler vice chairman and president Jim Press said in a press release.

“With the downsizing of operations after the sale and reduction of plants and production, similar reductions must be made to the size of the dealer body,” he said.

Coleman said his Ewing dealership will lose its Jeep franchise, and his Highstown Chrysler-Jeep dealership will have no new vehicles and likely sell only used cars.

He was left literally stunned by the news. But along with many of the other affected dealers, Coleman, whose father, Lew, opened the Ewing dealership in 1967, quickly moved from sadness to anger, and to action.

He’s written to President Obama, signed on with lawyers trying to intervene in the bankruptcy, and is closely watching a U.S. Senate effort to delay the dealership closures for 60 days.

Dealers are independent business people who represent little cost to Chrysler, making their closure hard to justify, he argues. They spent millions to set up and maintain their dealerships, and those affected by the shutdown now stand to lose their businesses without compensation.

On his computer, Coleman loaded up a segment from The Daily Show that showed news clips of crushed Chrysler dealers around the country and mocked the automaker for its heartlessness. The U.S. government shouldn’t allow Chrysler to cut off its longtime partners so suddenly, Coleman said.

“My service manager has been here 42 years. My top tech’s been here 40,” Coleman said. “We all work hard together. It’s a family business.”

“And the government just comes in and says, `You know what, we don’t like you any more. Get out!’“ he said, slamming his hand on his desk. “How do you think that makes them feel? We did nothing wrong.”

Coleman contends Chrysler is using bankruptcy as an excuse to make long-planned changes that are unfair to the affected dealers and, by reducing the number of dealerships, will actually hurt the company’s long-term prospects.

“The whole premise of Chrysler’s bankruptcy is that they want to sell more cars,” he said. “Under this plan — and you ask them, they’ll tell you — they’re going to sell less cars.”

Coleman said for years Chrysler has been pushing dealers to sell all its brands under one roof and not to sell other manufacturers’ vehicles, as he does at his Ewing location.

He spent millions to acquire Chrysler franchises in Highstown and follow the program, but the automaker made its demands even stricter along the way and has repeatedly warned him he is not complying with the company’s plan, which it calls Project Genesis, he said.

Bankruptcy will allow Chrysler to unilaterally break its contracts with dealers, shutting down showrooms that don’t fit its marketing plans, even if they’ve been successful, he said.

Chrysler has suggested it is targeting underperforming dealerships, and said that half of the dealers slated for closure sold fewer than 100 vehicles last year. But Coleman said he sold 120 to 160 new and used cars monthly before the recession, and still moves 75 to 80 a month now.

At the same time it is closing hundreds of showrooms, the automaker actually plans to expand other dealerships.

For example, Dick Greenfield Dodge on Business Route 1 in Lawrence, four miles from Coleman’s lot in Ewing, stands to gain a Chrysler and Jeep franchise even as Coleman’s business is being taken away.

“They were never happier when they finally had a way they could snatch the franchise from me they’ve been coveting all these years and give it to Mr. Greenfield,” Coleman said.

Greenfield confirmed that he was notified he is supposed to get new Chrysler-Jeep franchises.

“They’ve been trying to put that together for a long time, but the bankruptcy allowed them to do that much quicker,” he said.

Greenfield said he’s “working in limbo right now” and waiting to see how the reorganization plays out. But he acknowledged he’s in better position than other dealership owners.

“I know Coleman personally. I feel bad for him,” Greenfield said. “Some of these dealerships have been in business for 90, 100 years, and they’re just being terminated. It’s a tough road.”

The latest insult is Chrysler’s sudden offer to buy back unsold vehicles from the affected dealers before they lose their franchises June 9, Coleman said. The company originally intended not to buy them back but came under political pressure to change its plan.

Coleman said he learned Thursday that the automaker announced it would pay for dealers’ cars, minus a $350 per vehicle fee, but dealers had only until 3 p.m. Friday to accept the offer, and would not actually get to see a copy of the agreement document until Tuesday.

Furthermore, it appeared that dealers who accepted “would effectively be conceding the termination of their respective dealership agreement,” according to an e-mail Coleman provided from Squire, Sanders & Dempsey, the Cincinnati firm representing the dealers.

It’s one more example of Chrysler trying to rush dealers into giving up their businesses so it can proceed with its bankruptcy, merge with the Italian automaker Fiat and put its marketing plan into effect, Coleman said.

He doesn’t see why the plan has to happen so fast, and why it must be so devastating to dedicated, successful dealers like himself.

“Wait a minute, Mr. Chrysler,” Coleman said. “You haven’t been too successful on any other things you’ve been doing for the last five years. Who’s to say you’re right? I think your track record is not too good.”

“How’s my track record?” he said. “I’m still here.”

 

This article is also available on NJ.com.

 

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