A tale of two dealers — only one is s pared

...?My guess is whatever sales this guy has were based on personal and traditional relationships. Their sales are incremental and made through those personal contacts,? he said. ?Once that?s gone there will be no allegiance to any Chrysler product.?...

A tale of two dealers ? only one is spared

formatting link
Chrysler axes 87-year-old Pa. franchise, spares more modern neighbor By Eve Tahmincioglu updated 7:32 a.m. ET, Tues., May 26, 2009

Two very different Chrysler dealerships, separated by just seven miles in southeastern Pennsylvania, are facing two very different fates.

Weathers Dodge in Lima, Pa., is 87 years old and offers a trip back to the 1940s, with its terrazzo floors, wood paneling and employees who seem to know every customer?s name. Just down the road in Glen Mills is David Dodge, which opened in 2005 and features more of a 21st century, big-box look, with its flat-screen TVs and freshly brewed Starbucks coffee.

One of these two dealerships got bad news and the other good news from Chrysler May 14 when the bankrupt automaker notified nearly a quarter of its 3,200 dealers that they would be dropped from the Chrysler family.

In Lima, Larry Weathers III opened an overnight letter from Chrysler headquarters with his 78-year-old father, Larry Weathers Jr., by his side.

?It is with a sense of profound sadness that we must take this step and reject some of our dealer Sales and Service Agreement(s)," the letter read.

Father and son stood shocked in the dealership that has sustained three generations of Weathers. They knew Chrysler was expected to dump dealerships as part of its restructuring under Chapter 11 bankruptcy protection, but neither expected the company would take away the franchise of one of its oldest dealers.

?When I read the letter out loud my father sank below the floor. There were tears,? the younger Weathers recalled. ?I was upset. I lost the air in my lungs.?

At the same time David Kelleher, owner of 4-year-old David Dodge, was opening a letter with more favorable news.

?We are pleased to inform you...," the letter said. "You can remain our dealer as we move forward with establishing a new company.?

Kelleher, who considers himself a friend of the Weathers family, was happy to read the letter, but he wasn?t surprised. ?With all the work we?ve done here, I couldn?t imagine another scenario for us,? he said.

He also was not surprised because at 8 a.m. that morning a regional company official called him to let him know in advance that his dealership and a second location he owns, David Chrysler Jeep at the Philadelphia Auto Mall, would remain part of the Chrysler family.

The Weathers got no such advance phone call, or any call at all.

The impersonal letter was how they found out their nearly nine-decades-old partnership with Chrysler was over, and that the future of Weathers Dodge, a fixture of the Lima community for decades, was unclear.

When he was interviewed a few days later, the younger Weathers was still angry about the way the situation was handled, and his father was not available for an interview.

The way the situation was handled still irks the younger Weathers.

?We just got the ax," Weathers said, grabbing onto a photo of his grandfather, Lawrence Weathers, Sr., who started the dealership in 1922. "They didn?t even take our history into consideration. It?s hard for the human brain to find common sense in it.?

Clearly, Chrysler?s decision to shutter 789 dealers across the country was not about sentiment but about trying to save the foundering company, which is operating with $9.3 billion of federal support. At least that?s how the company and auto experts frame it.

?It?s not a reflection on the dealership,? said Kathy Graham, a Chrysler spokeswoman who explained the company's thinking, although she would not comment on any specific dealer situations. The decision to end the franchise relationships was ?data driven,? taking into consideration everything from customer satisfaction to the number of brands under one roof.

Chrysler has not provided any specific details about how executives made the final decisions. But the treatment of the Weathers, a longtime Chrysler dealership family that consistently exceeded the company?s minimum sales requirements and had 35 ?Five Star? service awards, offers a glimpse of where auto retailing wants to go.

It?s about the future, not the past. And dealerships like Weathers will increasingly be the ones left out in the cold, while upstarts like David Dodge are rewarded.

Weathers Dodge, which has sold an average of 310 new vehicles a year over the past three years, was built in the mid-1940s. Aside from upgrades such as a new roof and boiler, it looks very much the way it did back then. The building, at about 12,000 square feet, has eight service repair bays and a cozy and nostalgic feel.

Despite being encouraged by Chrysler brass in the past to make more changes, Weathers had yet to make any major renovations. ?We always focused on the customers, the good old-fashioned way," he said.

By contrast, David Dodge, which has been selling an average of 984 new vehicles a year, includes 20,000 square feet with 15 repair bays and a large vehicle lot. With the flat-screen televisions, including one in a separate kids? playroom, "it?s all about the customer experience,? Kelleher said.

Kelleher's road to becoming an auto dealer was a far different one than the one traveled by Weathers.

For Weathers it seemed predestined. At age 11, with both his father and grandfather in the business, he began working in the dealership?s detail shop during the summers and part time.

After graduating college in the late 1970s and serving as an officer in the Navy, he went to work at the family business full time in 1982. He now co-owns the business with his father.

Kelleher, whose father was a bailiff and mother a schoolteacher, says he got into the business by accident. Originally from Boston, he came the Pennsylvania for college, where he studied political science with plans to become a lawyer and then go into politics.

After college, he ended up working at a dealer to make extra money.

"I saw an ad that read 'make $50,000 first year' (and) answered it knowing it was a lead-on," he said. "The first year I made $82,000. I moved to management shortly thereafter."

Kelleher bought into a partnership at a Havertown, Pa., dealership in

1998, and in 2005 he bought his own Dodge dealership and immediately upgraded it with a new facade.

Experts say that Chrysler dealerships need to be larger today to house the company's three major brands ? Chrysler, Dodge and Jeep ? a goal the company has been pursuing for the past five years with its Project Genesis.

Weathers says his dealership could have handled the three brands with slight renovations, but he maintains Chrysler told him that they ?couldn't give us the other franchises since we were too close to others or they were not available.?

Both Weathers and Kelleher have been keeping costs down and holding their own despite taking some hits to the bottom line.

Sales at Weathers are off 24 percent, compared with an average Chrysler dealer's decline of 35 percent, says Weathers. Despite the decline, the dealership has not laid off any of its 29 employees.

Kelleher says his staff has shrunk to 38 from 125 last year, mainly through attrition, as monthly profit increases have fallen to 0.8 percent, from about 4 percent during good times.

Chrysler spokeswoman Graham says profits were not an ?overwhelming factor? in the company's decision, but some industry watchers believe the smaller volume of a dealership like Weathers' must have been a factor.

?When they looked at dealers they looked at size and sales, the ones selling lots of cars,? said Mike Boudreau, a turnaround expert with O'Keefe & Associates in Bloomfield Hills, Mich.

Others say that approach would be shortsighted.

?It costs them very little to keep this guy,? said George Hoffer, professor of economics at Virginia Commonwealth University, referring to Weathers Dodge.

?My guess is whatever sales this guy has were based on personal and traditional relationships. Their sales are incremental and made through those personal contacts,? he said. ?Once that?s gone there will be no allegiance to any Chrysler product.?

Indeed, customer loyalty has kept Weathers Dodge in business. After local television stations descended on his dealership last week to interview Weathers about the loss, he was flooded with e-mails and phone calls from customers, community leaders and even other area dealerships.

Even Kelleher was upset by the decision to eliminate Weathers Dodge, where he once sent family members to buy vehicles.

?I consider Larry and his dad to be my friends,? he said. ?I could not disagree more with the Weathers decision, it?s sickening. But they have a knife right now and they?re cutting.?

While some Chrysler dealers plan on fighting Chrysler's effort to eliminate them, Weathers has no intention of joining them.

Losing the Chrysler franchise as of June 9 means he will not be able to sell new Chrysler vehicles or do any warranty work on the company?s cars. It will be a heavy blow to his business, but he plans to focus on selling used vehicles and offering service, and looking for another auto company, possible a foreign maker, to work with.

It?s unclear if Weathers will be able to ride out the storm, and he?s not sure what that will mean for his family, his staff, or for the many community groups he?s donated to and volunteered with over the years.

Ironically, a week before the rejection letter arrived, Weathers Dodge was named 2009 Family Business of the Year by the Delaware County Chamber of Commerce.

?Companies like Weathers represent the county, sponsoring local little league teams, employing people here for decades,? says Jeff Vermeulen, president of the chamber. ?If they leave the area it would just be a tragedy.?

Weathers, who has four children with the oldest in 12th grade, is confident he?ll come back bigger and better.

?I have to turn the page and move on,? Weathers says, choking up and brushing away a tear. ?It?s all about how you deal with things in life. Every second you put toward that negativity is a second you don?t see an opportunity.?

In an e-mail, he added: "It is not about fancy buildings and expensive front doors. Maybe that is why many dealers and Chrysler are in trouble. What is lost in the world today is the basics that the country was built on. Principles, morals, hard work, honesty and integrity. We have been a sturdy, hard working, dependable, superior performing dealer. Did you ever hear the story of the tortoise and the hare? The hare never wins."

Reply to
Jim Higgins
Loading thread data ...

Aren't there some Chinese auto manufacturers planning on selling cars in the states? And Indian companies?

It seems to me that by taking away these franchises, Chryser is asking for MORE competition.

Reply to
Pete E. Kruzer

My exact thoughts. However I note that:

Were they stuck in the past? It would be very interesting to deal with these two dealerships and note the differences.

Near me is a Chrysler dealer from the past. They came to Chrysler from American Motors, have a great sales location, but an inferior shop. As it was from the 70s when I first saw it. Their location is small so it would be difficult to built a proper sized modern sales service building. I sometimes buy minor parts there, but often they don't have it in stock. I would expect them to be dropped, but they do move stock because of their great location. I certainly don't take my Chrysler in there for a significant repair.

Reply to
Josh S

Hi!

And that is probably why one survives while the other closes.

...but you know what? I think I'd rather shop at the older dealership. I realize that I'm probably in the minority, but keeping it simple (as it sounds like the Weathers have) is what I like. So few new car dealers keep it low key any more...

Hopefully they'll be able to continue their business and support themselves by doing something else. Maybe if Chrysler recovers they can rejoin the company.

William

Reply to
William R. Walsh

Now we have some more information about the government-operated Chrysler's criteria of dealers that were closed versus those that were spared. This is really fascinating stuff!

----- Dealers who give to Republicans much more likely to be shuttered

As part of its Chapter 11 bankruptcy, Chrysler is terminating one-fourth of its franchises ? but some say its catalog of doomed dealerships looks more like a hit list that specifically seeks to put Republican donors out of business.

Chrysler will now be eligible for up to $8 billion in taxpayer-funded federal aid. The federal government has already provided $8.58 billion to Chrysler and Chrysler Holding between the months of January and May of this year. The Treasury also loaned $1.5 billion to the automaker's lending arm in January.

President Obama has said the bankruptcy will give the company "a new lease on life," after his administration spearheaded a plan requiring the company sell to Italian automaker Fiat. Chrysler's stronger operations will be owned by Fiat, labor and the U.S. and Canadian governments. The sale could close as early as this Friday.

Obama said the bankruptcy would be a "quick" and "efficient" step toward Chrysler's "survival."

"The necessary steps have been taken to give one of America's most storied automakers, Chrysler, a new lease on life," Obama said. "This is not a sign of weakness."

But WND reviewed the list of 789 closing franchises and databases of political donors and found that of dealership majority owners making contributions in the November 2008 election, less than 10 percent gifted to Democrats while 90 percent gave substantial sums to Republican candidates. .........

FULL ARTICLE

formatting link

Reply to
John

The conclusion that the article is suggesting *may* or *may not* be true. It shows how statistics can be abused. For example: What if Chrysler dealership owners across the board tend to donate to Republican candidates - IOW 90/10 statistic of the closed dealerships may in fact be *true*, but it may be that it's statistically 90/10 Repub/Dem donations for *all* Chrysler dealerships - ones that are bing closed and ones that are not being closed.

I'm not saying that that is necessarily the case, but without giving all the statistics to establish that other part of the picture (i.e., what was the Repub/Dem giving ratio of the dealerships that are remaining open?), the article is being nonscientific at best, dishonest at worst.

It's kind of like saying: "30% of accidents involving injuries or fatalities involve drinking. That means that 70% of such accidents do not involve drinking - *THEREFORE* the roads would be safer if people made a point of driving while drinking.

Reply to
Bill Putney

All your many words can be summarised by one:

CONSPIRACY

DAS

To send an e-mail directly replace "spam" with "schmetterling"

Reply to
Dori A Schmetterling

MotorsForum website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.