by Ivan Foley
The struggles of U.S. automaker Chrysler hit close to home on Thursday.
Chrysler announced that it will eliminate about one fourth of its dealerships across the country, including the Tony Martens Dodge dealership in Platte City.
Tony Martens Dodge has been open since 1987 at 601 Main St. in downtown Platte City. Chrysler announced on Thursday that it intends to eliminate the Tony Martens affiliation by June 9.
It’s all part of a bankrupty court filing. Tony Martens Dodge is one of 789 dealers Chrysler intends to eliminate as part of a restructuring process. On June 3, a bankrupty court judge in New York will determine whether to approve Chrysler’s motion. Judges often rely on companies in bankruptcy to help determine what is in their best business interest.
“My plan is to be here as long as I can,” Martens told The Landmark in a phone interview Wednesday morning.
Martens said he employs nine people. He said he has heard nothing further from Chrysler since the bad news came down last Thursday.
“We would want to stay open. The only thing that has happened that’s news is that we will not be reassigned to the new company,” Martens said.
Though no final decision about the future of his business has been made, Martens said one option being considered would be to stay open as a service and used car center.
“We will certainly look at that,” he said.
According to a report in the Huffington Post, Chrysler executives said the company is trying to preserve its best-performing dealers and eliminate those dealerships with the weakest sales. More than half of the dealerships being eliminated sell less than 100 vehicles per year, the Post report said.
A Chrysler vice chairman is quoted in the Post story as saying the list of dealers being eliminated is final and there will be no appeal process.
The 3.5 million customers who purchased vehicles from the eliminated dealers will be notified about the pending closures and their warranties will still be honored.
Dealers like Tony Martens were told of their fate Thursday morning through United Parcel Service letters.
Tony Martens was one of three dealers in this region to get the bad news. Franchises in Atchison, Ks. and Hiawatha, Ks. also are targeted for elimination by June 9.
Car City Chrysler in St. Joseph survived the cuts.
In its bankruptcy filing, Chrysler said it has many dealerships that sell one or two of its brands, with Chrysler-Jeep dealerships competing against Dodge dealers as well as other automakers across the country.
Bankruptcy papers also indicate Chrysler dealers are not competitive with foreign brands. Chrysler sold an average of 303 vehicles per dealer in 2008, while Honda Motor Co. sold about 1,200 vehicles per dealer and Toyota Motor Corp. sold about 1,300 per dealer.
Chrysler has received about $4 billion in federal loans and filed for bankruptcy protection on April 30.
Sales for Chrysler this year are reported to be down 46 percent compared with the first four months of last year and the company reported a $16.8 billion net loss for 2008.
In other auto industry news, General Motors announced Friday that 1,100 of its dealerships are not economically viable and will be closed. GM’s situation is different from Chrysler in that Chrysler is in bankruptcy so its list of eliminations became public information through the court filing. GM is not in bankruptcy and its matters are being handled in-house at this point. GM is leaving announcements of closings up to the affected dealers.
Roberts Auto Plaza of Platte City escaped the GM axe.
“It did not affect any of our three locations,” John Roberts of Roberts Auto Plaza told The Landmark Wednesday morning.
Roberts did say there may be more action from General Motors in the future, as he is hearing some dealerships may eventually be forced to consolidate.
He said “single point” dealers--those who offer only one brand of GM vehicles--could be forced to consolidate with others.