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 don’t think America really cares which franchises are propped up with taxpayers dollars.
First, it’s hard to be sympathetic to any car dealership. Raise your hand if you haven’t been screwed over or at least misled by one.
Second, this diatribe misses the point: The market, not Zero, decided Chrysler was not worthy of continuing. His franchise would have been killed by the market in any event, just like it will once his neighbor gets it. Someone indeed supportive of “the American Way”, a/k/a the free market economy, would understand that, and move on to more productive things than crying about not recieving their piece of the bail-out pie, which is a greater miscarriage of justice against ALL Americans.
To the author: Sorry your ox got gored, but we’ve been trampled, and don’t really care that you’re losing some generational wealth.
Alvin, Texas, Texas 14th, representative......Ron Paul
Can’t you read?
“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.”
Wow. 4 months of data. I would not hire/fire anyone based on 4 months of data.
I wonder what their sales have been over the past several years?
Don't get caught up in numbers. Many of these dealers are simply fast talkers and good number manipulators, but did not bring home the bacon when it counted.
Did you pay cash for the home you own?
Sounds like Ron Carter had both Chrysler and Jeep lines in their store and the one losing across the street only had Dodge. Looks to me like Chrysler is consolidating much of their dealerships into multiple lines such as Chrysler, Dodge and Jeep all in the same store. GM is doing a lot of that also or so it seems to me.
now all the bankrupt brands will be under one roof....GREAT!!!! in truth this is sh!t....the guy losing out is a successful dealer....invested his OWN money in his dealership and guess what....he gets F@#$@#!..... America will never be the same....lock and load.....it is coming......
You work for a wage or invest your money and take your chances. Nothing is a guarantee only the opportunity to persue your choice is there. Get used to it as auto malls are coming much like Walmart took over merchandising in the retail sector.
See. To a lot of you here that's the whole thing isn't it? Screw the fact that the Obama administration is tossing bankruptcy laws out the window and is imposing their brand of fascism on our great nation. I suppose that just leaves you feeling all tingly, doesn't it?
All you care about is that GENERATIONAL WEALTH. God forbid anybody do well on this earth and pass it down to their kids. That's just not right in your small world, is it?
Good luck with your class warfare, Bubba. It'll serve your new masters well.
I do not understand how this can happen WITHOUT compensation.
another one?....same thing happened to a dealership owner here in Melbourne, Florida.
He needs to commit his life to demolishing liberalism from every nook and cranny of society.
No. We have a modest home, a a conventional mortgage, and a low interest rate.
Why do you ask?
If you can’t figure it out, then I won’t bother to elucidate. Some things are in fact self-evident
It's clearly safe to assume you are incapable of forming a cohesive argument in favor of giving the hard-earned tax dollars of American citizens to private companies which have shown that they cannot manage their own affairs and their own money, and would like a shot with public tax dollars.
There is absolutely no similarity between private individuals (potential homeowners) who contract with private entities (banks, credit unions) assuming risk based on established credit history doing business for the benefit of both parties, growing wealth on both sides.
A private entity (Chrysler) begging for government tax money to bail out a wrecked company with a history of poor decisions and faulty products which no one is buying. Free market forces are not at work there - only market manipulations.
Further, there is absolutely nothing conservative about taking tax dollars from earners and giving (or "lending") them to private concerns.
Conservatism = Free Market Economics = Freedom and Prosperity.
Liberalism = Manipulated Market Economics in a futile attempt to make everything "fair" and "equal" = slaving away, only to have the proceeds of that labor taken and given to those who won't/can't/don't want to/are too stupid or incompetent to work.
I agree that the government should not be involved in private business...I meant that the 1st Chrysler bailout did not include the government being part owner nor the taking of the bond holder's equity.
Iaccoca and team paid it all back.....
The free market was killing an obsolete business, Zero didn’t bail him out. Deal with it, Komrade.
Yeah, right. So how many pictures of Mussolini and Chavez hang on your bedroom walls?