More than a dozen Chrysler dealers across the state reacted with confusion and anger Thursday after receiving notices or hearing secondhand that their stores are slated for closure.
The scene played out across the country after Chrysler said in a filing in federal bankruptcy court that it plans to terminate the franchises of 789 of its 3,188 dealerships nationwide. It intends to close them by June 9.
Thirteen of the targeted stores are in Colorado. The state has 44 Chrysler dealerships. Pennsylvania is losing 50 stores, California and Florida are each losing 35.
“I don’t think we’ve seen all of it,” said Tim Jackson, president of the Colorado Automobile Dealers Association. “This is just the first shoe to drop.”Chrysler will not buy back any inventory from the dealers. A court approval hearing is expected June 3.
The affected dealers represent 14 percent of total sales by volume, according to Chrysler.
“We will have a more profitable network going forward,” Chrysler Vice Chairman Jim Press said in a conference call Thursday. “There are no winners or losers here.”
Most of the outlets set for closure are in urban areas. It is estimated that 38,000 jobs will be lost, according to . In Colorado, each dealership has about 60 to 80 employees, according to CADA. But job losses are hard to estimate because about half the dealerships sell other brands and might not close.
Those in the auto industry are geared up for more news: General Motors is expected to release its list of dealerships slated for closure today. GM plans to cut about 2,600 of its 6,246 franchise agreements.
Goal is to increase profitability
The manufacturers do not necessarily save money by decreasing dealer ranks but hope to increase profitability among remaining retailers, experts say.
It doesn’t make much sense to Jackson.
“They terminated two of the top dealerships in the state,” he said. “We don’t want to see any go, but why would you terminate two of your top producers? You want to say it’s a mistake, but it’s right there in black and white.”
Jay Cimino of Phil Long and John Medved of Medved AutoPlex, owners of the two most well-known Colorado Chrysler stores on the list, declined to comment.
Also on the list is Burt Dodge Chrysler Jeep in Parker. Jackson said Go Dodge Southwest in Littleton is also targeted, as are dealerships in Montrose, Durango, La Junta and Craig.
CADA is advising dealers to join a lawsuit being filed by an Ohio law firm on behalf of affected dealers.
“I think it was heavily political inside of Chrysler on the dealers they wanted to keep and the ones they didn’t,” Jackson said.
It’s true, experts said, this could have been used as an easy way to pick and choose dealers for any number of reasons despite sales.
Sales rates, satisfaction levels and number of Chrysler brands all played a role in the decision, said Karl Brauer, editor and chief of .
Some dealers plan to stay open
In Durango, Nancy Ariano, owner of New Country Auto Center, is losing Chrysler. She said she got the news from CNN. But Ariano’s dealership also sells Ford, Toyota, Saab and Kia, and she has a Chrysler store in Cortez that is unaffected.
“I’ll feel a 10 percent pinch, but I’ll have to make it up another way,” she said.
Lithia Motors Chrysler Dodge in Colorado Springs is slated to go away, but executives at the Oregon-based auto group plan to keep it open. Lithia is getting five franchise stores in the Chrysler shuffle and losing two.
At the Phil Long Denver Jeep Chrysler at 7800 W. Stanford Ave., moods were somber. Many had drab faces even as they were helping customers.
Asked for comment, one employee responded in disgust: “If I were you, I’d keep walking.”
It was a different story next door at the Phil Long Ford of Denver. Employees were preparing for a bimonthly dinner party for new-car buyers featuring former Denver Broncos linebacker Randy Gradishar. When asked how he’ll be affected by the dealership closures, salesman Derrick Brown was upbeat. “It’s going to double my business.”
Staff writer Andy Vuong contributed to this report.
Elizabeth Aguilera: 303-954-1372 or eaguilera@denverpost.com
Closures slated in Colorado
Chrysler notified the following dealers their franchises are being revoked.
Big Valley Ford- Lincoln Mercury: Larry D. Miles, Big Valley Chrysler/Dodge Inc., 26730 West Highway 50, La Junta
Bill Hellman Motor Co.: Ralph Hellman, Hellman Motor Co., 750 E. Highway 92, Delta
Burt Dodge Chrysler Jeep: Lloyd Chavez Jr., Burt Dodge Chrysler Jeep in Parker Inc., 9900 Twenty Mile Road, Parker
Cook Chevrolet Inc.: Scott Cook, Cook Chevrolet Inc., 1776 W. Victoria Way, Craig
Fort Morgan Auto Center: Rickey Harper, Fort Morgan Auto Center Inc., 1010 W. Platte Ave., Fort Morgan
Go Dodge Southwest: 7980 W. Tufts Ave, Littleton
King Auto Group Inc.: Yale King, King Auto Group, 1800 Industrial Circle, Longmont
Lakewood Chrysler Plymouth Inc. and Medved Chrysler Jeep Dodge Inc.: John Medved, Medved Chrysler-Jeep Inc., 11201 W. 1-70 Frontage Road North, Wheat Ridge
Lithia Inc. Jeep Chrysler: Sidney Deboer, Lithia Colorado Springs Jeep Chrysler Inc., 15 E. Motor Way, Colorado Springs
New Country Auto Center Inc.: Nancy Ariano, New Country Chrysler, 1200 Carbon Junction Road, Durango
Northglenn Dodge Inc.: David Fitzgerald, 759 W. 104th Ave., Northglenn
Phil Long Denver Jeep LLC: Gerald Cimino, Phil Long Denver Jeep Chrysler, 7800 W. Stanford Ave., Denver
San Juan Motors Inc.: Richard Pollard, Pollard Bros Motors LTD, 1880 N. Townsend Ave., Montrose
