Chrysler lists 20 dealers for closure in Minnesotaby Annie Baxter, Minnesota Public Radio
Chrysler wants to sever its relationship with 20 auto dealerships in Minnesota. The auto maker has about 3,200 dealerships nationwide and is trying to eliminate nearly 790 of them during bankruptcy. The automaker says the cuts will be finalized by June 9.
St. Paul, Minn. — Twenty Minnesota auto dealerships are on Chrysler's official elimination list, including one owned by auto giant Paul Walser. But Walser's company insists they aren't closing any stores, and that Chrysler is only preventing them from re-opening a store in Bloomington that was closed years ago.
So Walser, the largest Chrysler dealer in the state, isn't actually shutting anything down.
That's just the start of the confusion.
The Web sites of several of the dealers on the elimination list display no Chrysler logos, though they feature other car makes.
Yet for others on the list, it's unclear whether the cuts mean a death sentence.
Scott Lambert of the Minnesota Automobile Dealers Association says 12 of the dealers sell other brands and some sell used cars, too, so that could keep them alive, though Lambert said their business will still be crimped. He expects overall dealer job losses to total about 250.
Lambert was reached by cell phone in Washington, D.C., where he and others were asking the state's congressional delegation and federal Auto Task Force to put the brakes on the dealer closings.
"The process for deciding who should survive and who should go is completely nontransparent," Lambert said. "We don't know what standards Chrysler used; we don't know what standards General Motors is using. Washington and Wall Street are picking winners and losers, and we think the market should be picking losers."
Jim Leonard, whose family owns Fury Doge Chrysler in Lake Elmo, is pretty confused by the process himself.
"We don't have the facts yet, we certainly have the letter," Leonard said.
The letter he's referring to came from Chrysler earlier today, and it says he's getting cut. But Leonard said his store isn't underperforming. He said new car sales are flat, at a time when other dealers' business is way down. He said used car sales are up 40 percent, and their service business is up 20 percent
"The first quarter, during arguably one of the toughest times for car dealers, was our best quarter of business in our history," Leonard said.
Leonard believes that the elimination list is not final, and that as the process unfolds, his business will get taken off of it.
"The letter we received specifically refers to that there is an appeals process," he said. "This is what they're presenting to the bankruptcy judge; it's not a final determination. It's what they are expecting, but it's not a done deal."
Chrysler said there is no direct appeal to the company about the store closings, but dealers can be heard through the bankruptcy process.
While Leonard is confident that he'll manage to stay open, other dealers on the list took the news much more solemnly.
"Today we're feeling really bad," said Peter Boe, who owns Boe Chrysler Center in West Concord, Minnesota, about 45 miles southeast of the Twin Cities.
Boe is 78 years old and his family-owned business has been going for more than 50 years. He admits that lately it's been slow, though it was enough to keep 6 people on payroll.
"We were satisfied with our volume, but it wasn't huge," Boe said. "We're a small town of 1,000, and it varied over the years. We had good years and bad years and lately it hasn't been wonderful. However, we're still doing business and still making the payroll."
Boe said Chrysler is not going to buy back any inventory, tools or parts from him once he's shut off as a dealer. He's worried he'll have to sell the inventory at a big discount to other dealers.
Overall, getting cut by Chrysler means a big financial and emotional loss to him.
Chrysler executives say the cuts were hard to make, but they believe the surviving dealers will be much stronger and that the company's dealer footprint will be more economically viable.
The Minnesota dealerships on the list are:
- Alexandria Jeep, Alexandria
- Boe Chrysler Center, West Concord
- Denny Hecker's Chrysler Dodge Jeep, Pine City
- Factor Motors, Le Center
- Fury Dodge Chrysler, Lake Elmo
- Iron Trail Chrysler, Virginia
- Marchant Motor Co., Spring Valley
- Bill Mason Chrysler Jeep, Excelsior
- Nereson Jeep, Detroit Lakes
- North Star Garage, Milaca
- Paul Busch Auto Center, Wabasha
- Miller Hill Chrysler Jeep, Duluth
- Salem Motors, Crookston
- Salmon Motors, Tracy
- Scholtes Auto World, Worthington
- Scott-Preusse, Redwood Falls
- Sonju, Two Harbors
- Stillwater Motor Co., Stillwater
- Wally's Auto Service, Orr
- Walser Bloomington Motors (already closed)
Editor's note: This story originally said Chrysler's list of closing dealers includes 19 Minnesota dealerships. Chrysler's list names 19 dealerships with Minnesota addresses. One dealership, Alexandria Jeep, is listed with a North Dakota address. The owners are in Grand Forks, North Dakota, but the dealership itself is in Alexandria, Minn.
- All Things Considered, 05/14/2009, 5:44 p.m.