Jan 6, 2010 5:32 pm US/Central
Shuttered Chrysler Dealers Get A Second Chance
ORLAND HILLS, Ill. (CBS) ―
If your local Chrysler dealer was forced to close during bankruptcy, it could be coming back. Dealers that feel they were closed unfairly -- and that's most of them -- will get a second chance to stay open. CBS 2's Derrick Blakley reports there's growing evidence the widespread shutdowns may have backfired on the company.
At the former Mancari's Chrysler dealership in Orland Hills, 400 cars once sat ready for sale in inventory. Now, the back lot sits empty.
The 20 service bays only store used cars, and the 80-employee workforce is now down to seven. That's the way it's been since the dealership lost its Chrysler franchise.
Alan Siegel, general manager at Mancari's Chrysler, said the company's selling used cars and maintaining the 10-acre site in hopes of regaining their franchise.
"That would be our whole focus," said Siegel.
Now, they'll get a chance. Under a federal law signed by President Obama, the 789 Chrysler dealers closed in bankruptcy nationwide will get a chance to argue it was all unfair. But was it?
"In a metro market where there are too many dealerships, I think consolidation needed to happen," said Morningstar Auto Analyst Dave Whiston.
Still, it appears customers rebelled.
Last year, Chrysler sold fewer than a million cars for the first time since the 1960's. And brand loyalty crumbled. In November, only a third of the customers trading in a Chrysler bought another one.
Some could be angry about Chrysler taking a taxpayer bailout. And Chrysler's aging lineup of cars doesn't help.
"It could also be a function of some people are just angry about how they've treated the dealers. Some of those dealers are their friends," Whiston said.
Asked if Chrysler blew it by closing so many dealerships at once, veteran dealer Stanley Balzekas Jr. said, "Well, who's gonna sell your cars if you don't have your salesmen?"
The Balzekas family's been selling cars for over 90 years, but they lost their Chrysler franchise, too. They signed a letter Wednesday requesting an arbitration hearing to regain it. They'll argue Chrysler needs inner city dealerships.
"Why take the dealers out of the city and put them in the suburbs?" Balzekas asked.
Mancari's will argue they've got a modern, suburban facility that's always been profitable.
"We would like to thank the Senate, and the Congress, and the president for allowing us the opportunity to be heard," said Siegel.
Chrysler dealers have until January 25th to apply for an arbitration hearing. Final decisions could take months, but restoring franchises won't be easy.
In many cases, the right to sell a brand has been taken from one dealer and awarded to another nearby. Switching it back could create still more problems.
(© MMX, CBS Broadcasting Inc. All Rights Reserved.)
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