Skip to comments.Letter from a Texas Dodge dealer.
Posted on 05/22/2009 8:57:28 AM PDT by Mississippi Guy
First time to post so not sure if I put this in the right place, but I found this and thought that it was a good read.
May 16, 2009
Recently, Chrysler, LLC notified Rogers Dodge, Inc., in Alvin, Texas of their anticipated closing of our dealership. Chrysler has pled their story quite publicly for several months in support of their request of billions of taxpayer dollars. This is our story.
We occupy a 3-year old Dodge-designed building for which we paid cash when it was built. It was appraised at $3,700,000 in 2007. We qualified as a Five Star dealer for the 2009 calendar year. We have remained profitable through all of this downturn. We have in excess of $1,000,000 in working capital in our dealership. We are selling at or above market share. We pay $75,000 per year in local property taxes and collect millions of dollars annually in state sales taxes. We employ 38 Alvin, Texas residents who all pay property tax, sales tax and income tax.
The owner, Mr. Peter Mankins, my uncle, owns 6 other dealerships, has no liens on any of his properties or franchises, and has a net worth in excess of $30 million. He has maintained a car dealership in Texarkana, Texas since the late 1960s. He purchased that dealership from my grandfather, who purchased it from my great-grandfather, who rode shotgun next to his father when he was 9, as they were settling the Oklahoma Territory. My great-grandfather started in the automotive business in the early 1900s as a motorcycle repairman, which eventually segued into an International Harvester franchise, and, subsequently, a Pontiac franchise. I have a large family, almost all of which are connected with auto dealerships in one way or another. I state all of this so that there is no confusion by Chrysler or the bankruptcy court or the US government over whether we are a group of half-committed dealers - we are not short-term auto dealers/we are committed over several generations. Chrysler and its dealers have been portrayed in the media as regressive small-town morons. Speaking solely for the dealers, I assure you this is not the case.
In the past year, we have embarked on several creative initiatives in order to remain profitable and out of bankruptcy court. We have become a very competitive used vehicle internet dealer by patterning ourselves after the most successful used vehicle internet dealers in the country. Selling more used vehicles than new vehicles is one of the stated criteria upon which Chrysler based their decision to close us. Would Chrysler have preferred their dealers join them in bankruptcy court? It was never our desire to allow ourselves to be a burden on the American taxpayers; nor do we plan this in the future. Selling more used vehicles has enabled us to not only avoid layoffs, but to actually grow our employee population from 25 to 38 during the period of May 2008 to May 2009, a 52 percent increase. Further, in the first four months of 2009, our new vehicle sales have increased by approximately 50% by employing the same innovative practices within our new vehicle department. Though Dodge district sales are down by about 50%, our new vehicle sales actually increased comparing April 2008 and April 2009. In our parts department, we have created one of very few eBay parts stores selling new factory parts. We have listed in excess of 4,000 Dodge, Chrysler, Jeep factory parts and are by far the largest internet seller of OEM DCJ parts in the world. This has increased our monthly parts sales by approximately 35% in a short 5 month period. In our service department, we have recently added an additional service advisor, a service manager, and three additional master technicians, have endeavored to maintain the least expensive oil change in town and, effective this month, extended our service hours to 14 hours per weekday and 10 hours on Saturdays. We were on track to move to 24-hour/7-day a week service hours by the end of 2009. Just this month, we hired a graduating University of Houston student as a photographer and videographer. We began the process of taking studio-quality photographs of our inventory, something which no other auto retailer in the country is doing. Evidence of our early progress with this can be found in a slideshow on our homepage at http://www.rogersdodge.com/ .
When Chrysler needed dealers to purchase inventory so that the factories could keep operating and their employees could retain their paychecks, we complied and ordered 10 months of inventory. Our interest on inventory swelled from $15,000 monthly to beyond $50,000 monthly. Effectively, we took pay cuts in order to support Chrysler's cause. When Mr. Landry uttered his veiled threat that Chrysler would "remember those who supported us and those who didn't," we felt that we had done our part to support Chrysler and its workers. Now, we realize that we were just supporting our own demise. Last week, we were given three weeks to dispose of five months of inventory. In doing so, we anticipate losing in excess of $1 million - we may actually have to inject capital into our business in order to go out of business. Our $2 million plus in equity in our franchise is now completely worthless. Further, we now face the very real possibility that our new building will sit empty for months or years until someone is willing to purchase it.
Despite all of this, Chrysler is taking our franchise so that it can be given to our neighbor across the street, Ron Carter Autoland. Ron Carter Autoland has the local Ford, Chevrolet, Chrysler, Jeep, Pontiac, Buick and GMC franchises. They occupy a 40 to 50 year old building that does not comply with any manufacturer's design standards. They have recently moved their Ford, Chrysler and Jeep franchises into the same building, a violation of their franchise agreements with both Ford and Chrysler. They have recently cut their service hours, consolidated their used vehicle operations and laid off many employees. The manager, and a major shareholder, of Ron Carter Autoland is Mr. Cary Wilson, President-elect of the Houston Auto Dealers Association - apparently Mr. Wilson's political affiliation is very important to Chrysler, the bankruptcy court and the US government.
How exactly does transferring our franchise to our neighbor serve Chrysler's stated purpose of thinning out dealer numbers? The franchise will still exist - it will just have a new owner.
Though I am a Washington, DC-educated attorney and former employee of the US Department of Labor and the US Senate and an active advocate of the American way of life, it is difficult for me to view this abrogation of our franchise rights as anything more than a manipulation of US bankruptcy court and law so that Chrysler LLC can transfer wealth between dealers they like and those they dislike, those that have agreed to under-table favors and those that haven't, and to settle old vendettas. This is not the purpose of US bankruptcy protection and, surely, it isn't why the US Treasury has given billions to Chrysler to keep them in business.
This is our story; however, it is, unfortunately, not unique. Allowing this manipulation of US bankruptcy law will set a precedent that effectively invalidates all state franchise laws. Though technically a question of law, many of these closings are politically motivated. Thus, anyone with any interest in retaining the US economic system in its current form must contact their political representatives immediately. Small businesses will have no legal protections if these closings are allowed to occur. Rome is burning, America - please wake up.
Nicholas Parks, President
Rogers Dodge, Inc.
I guess you’ll just have to sue the new owner, Alias...aka. President Barak O.
Good points, well written, but
“apparently Mr. Wilson’s political affiliation is very important to Chrysler, the bankruptcy court and the US government.”
was all he needed to ask.
This certainly has a familiar stench to it......and for all of those garnering assets at the expense of your fallen teammates, the criminals you are dealing with will eventually come for you too......
Did he benefit from the Chrysler bailout that took place in 1979?
Not relevant...Chrysler paid back every penny of that bailout.
Just a side point. The state franchise agreements, which the dealers zealously support ( and without bankruptcy Chrsyler could do nothing..terminating a dealer used to be the equivalent of trying to fire a bad teacher ) sort of laid the groundwork for this years ago. When Chrysler killed Plymouth, it made no sense for Chrysler in Alvin to be sold by a multi-dealer line, when it should have been paired with the Dodge dealer. But no way the guy would give it up, without a BIG pay off, I suspect..
This guy needs to fi.e an adversarial action in BK court. He could stretch this thing out for years with not a lot of effort. If Chrysler is doing this, it is BK fraud and an honest BK judge will see right through it and rule for him if the judge is honest.
But I do look forward to hearing all those RATs from Congress telling us last July how sound was Freddie and Fannie. (or was that the year before? they killed proper regulation so many times, it's hard to keep track.)
Confidential to dealers losing franchises: open a pitchfork store, I sense a growing demand.
File an objection with the bankruptcy court asap. Play every card. Get women admin workers to picket other dealer. Dem hq, everywhere else. Get black employees to call naacp then picket. Call tv stations etc. Underlying message: unfair unamerican’ etc.
Finally, if dodge makes money selling cars, why close places that sell their cars? Huh:
Sad story for sure but, Rogers Dodge forgot to mention something important.
For about 10 years now Chrysler has been fairly active in streamlining their dealership operations by way of “pro-pack”, i.e. doing Chrysler-Jeep-Dodge all in one dealership. Through this process, no doubt many single brand dealers got absorbed, while the diehards hung on. Diehard yes, but they still die, in the end. Most unfortunately, but not unseen.
One can barely argue against efficiency these days.
I’m not diving in to this one again.
I’m not, I’m not, I’m not.
You can’t make me!
And that money helped turn Chrysler around at a time when it was darn near dead. The money was paid back with interest in less time than origianlly scheduled. That’s more than you can say for the money we lent Mexico for it’s bailout
It is very relevant.
The government has absolutely no business or right to subsidize private industry with tax money.
When they do, as with every other government intervention, the government gets to decide the terms. Assuming he benefited in 1979, it's hypocritical to complain now because the terms don't suit him.
They were profitable on used cars.
In other words, they were not making money for Chrysler.....which is the point of having a Chrysler franchise!
Sorry, but if they are so good at selling used cars, let them continue to do it. They don’t need Chrysler for it and then they can stop their whining.
Is it ok to give tax money and loans backed up by tax money when the outcome is good?
How about this: It's never ok to use tax money to bail out private industry, regardless of the outcome. It runs counter to the free market system which Conservatives support.
Tax money isn't supposed to be used to prop up failing businesses. I'm really shocked that you think it is.
I wonder who this guy donated to politically. Even more important, check Ron Carter's donations.
It puts the lotion on the search button...