Wednesday, May 30, 2007

Chrysler dealers eager for fresh start in U.S.

Justin Sullivan / Getty Images, a research Web site for car buyers, predicts Chrysler sales will increase 6.9 percent in May while most rivals will see declines.

Bringing back the pride

Josee Valcourt / The Detroit News

John Schenden, president of Pro Chrysler-Jeep in Denver, put his expansion plans on hold earlier this year with the future of Chrysler in limbo.

"Do I go ahead with this plan? Do I wait and see?" he said. "I was sort of dragging my feet a little bit."

But when DaimlerChrysler AG announced last week that it was selling the majority of Auburn Hills-based Chrysler to New York-based private equity firm Cerberus Capital Management, the decision became much easier.

"I had a lot of concerns … but now I'm going full force to get this done," Schenden said. "We're an American company again."

Many Chrysler, Jeep and Dodge dealers nationwide appear eager to start fresh with Cerberus and put the contentious and difficult past year behind them.

Chrysler CEO Tom LaSorda recently told employees that dealer orders were headed back up and inventories were down significantly from last year's bloated levels. And it appears customers sitting on the sidelines while Chrysler was being auctioned are coming back to showrooms., a research Web site for car buyers, predicts Chrysler sales will increase 6.9 percent in May while most rivals will see declines.

This is welcome news to dealers who nearly revolted last year as Chrysler pushed them to order excess vehicles they couldn't sell. The tensions led to the ouster late last year of Chrysler's top sales and marketing executive, Joe Eberhardt, an ex-Mercedes officer.

Several dealers said they were pleased that Chrysler will be an American company again after nearly a decade of German control.

Chuck Fortinberry of Clarkston Chrysler Jeep was so moved that he commissioned a painting of a fluttering American flag emblazoned with the words "Bringing Back the Pride" to hang in his dealership.

"There's a lot of pride that we're an American owned company again," Fortinberry said.

After the sale was announced May 14, LaSorda sent a two-page letter to dealers explaining the transaction and reassuring them that Cerberus was committed to fixing Chrysler and not chopping it up.

The next day, LaSorda, Steven Landry, Chrysler top North American sales executive, and Cerberus executive Leonard Tessler spoke to dealers via a Web cast.

In the next month, dealers will gather in Detroit to talk about future products and other issues.

"Chrysler and Jeep brands are not going to go away," Fortinberry said. "That's where the value is. That's what Cerberus bought. That's the value in the company."

Dealers such as Gordon Farhat of Westborn Chrysler Jeep are wondering if the sale could mean that Chrysler's lending arm -- Chrysler Financial -- would be consolidated with GMAC, which is majority-owned by Cerberus.

And although Chrysler could ramp up its push to further reduce its 3,750 sales outlets, Farhat thinks strong dealers have nothing to worry about.

"Twenty-two of the top dealerships in the country are in Michigan," Farhat said. "Dealerships like us aren't going to go away."

To Knoxville, Tenn.-based Chrysler dealer Jim Quinlin, the deal was close to perfect. DaimlerChrysler holding onto a 19.9 percent stake in Chrysler "means we still reap synergies with Mercedes," but "Cerberus will be able to take Chrysler private and do what they need to do get this thing fixed."

With the automaker's future more defined, Schenden is among several Chrysler, Dodge and Jeep dealers investing in their operations.

At Pro Chrysler-Jeep in Denver, an expansion project includes an addition acre of land as well as a renovation of the exterior and 28,000-square-foot showroom.

Ken Zangara of Zangara Dodge in Albuquerque, N.M., plunked down some $500,000 to renovate his dealership even before the deal was announced.

"I wouldn't have done it if I didn't think we'd be in good shape for the future," Zangara said. "We're getting a fresh opportunity. "We need to make sure that we don't foul it up again."

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