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Chrysler dealership closures may hurt small-town economies

Chrysler's plans to close local dealerships could hurt the state's economy

Published: Friday, May 15 2009 12:00 a.m. MDT

The Barber Brothers dealership in Spanish Fork is among 10 Utah dealerships targeted for closure by Chrysler in its restructuring plan. (Jason Olson, Deseret News) The Barber Brothers dealership in Spanish Fork is among 10 Utah dealerships targeted for closure by Chrysler in its restructuring plan. (Jason Olson, Deseret News)

Fred Barber, owner of Spanish Fork's Barber Bros. Motor Co., was working the phones Thursday afternoon at his Main Street dealership, taking inquiries from the likes of the Wall Street Journal and the Washington Post and trying to answer the same questions he was asking himself.

Why were Barber's Chrysler dealership and nine others from Utah among the 789 dealerships nationwide singled out by Chrysler LLC, in bankruptcy-court filings, to be eliminated by June 9? Was there any rhyme or reason to why certain dealerships were selected and others not? What's next for the targeted dealerships, and what will be the ripple effects?

"It's going to devastate this small town — I'm probably one of the largest tax-collecting businesses here in Spanish Fork," said Barber, who has been selling Chryslers for nearly four decades, including the past 26 years as a dealership owner and 22 years as a member of Chrysler's dealer council.

"This is as close to socialism as I've seen — we've got the government running the automotive industry," he added.

Jim Lunt, vice president of Lunt Motor Co. in Cedar City, said employees at his Main Street dealership are anxious, while the owners feel "abandoned."

"It's like they chopped out your legs," Lunt said. "We haven't looked at other manufacturers. We've stuck with Chrysler through thick and thin. You kind of feel like you've been thrown overboard."

Barber's got to figure out how to adapt his dealership without a third of his Chrysler-GM-Mitsubishi offering. He's got six-dozen Chrysler vehicles right now on his lot, and he sells between 250 to 300 Chryslers a year.

After boasting a dealership staff of 71 two years ago, Barber's contingent is about half that now — and he anticipates another 50 percent reduction as Chrysler pulls the plug.

"The threat of [Chrysler's] bankruptcy has taken away the customer base for the past year," said Barber, who first learned of his dealership's fate by reading an Internet blog late Wednesday night and then getting the official letter from Chrysler delivered mid-morning Thursday via United Parcel Service.

And until he received his own letter late Thursday morning, Lunt said he believed his dealership was in a safe place.

"Business is down, but we've been holding our own," he said. "We've got good, loyal customers. We've got a customer base that goes 100 miles in all directions."

But potential Chrysler customers may have to drive greater distances in the future for a car purchase.

Without the 10 targeted dealerships, Chrysler's only presence along the I-15 corridor from Layton north into Idaho and from Provo south all the way to Las Vegas will be in Layton and Brigham City. And affected dealers were scratching their heads as to why they were tapped out, while dealerships in smaller towns such as Roosevelt, Vernal, Morgan and Richfield were left alone.

"I can't believe it will stay this way," said Dave Morris, general manager of Tri-State Motors in Cedar City. "Chrysler will lose a lot of market share (in southern Utah)."

He stressed that the public should realize this is a company decision — not a reflection on the individual dealerships — because left to themselves, the individual dealerships would be fine.

Meanwhile, Tri-State will be among the dealerships that will look more to other lines they offer.

"It will have an impact, but not a huge one," said Morris of his company. "Jeep (Chrysler) was not a big part of our business."

As a GMC dealer, he doesn't expect any layoffs, because he said having diversified dealerships is a good way for dealers to keep stability.

Meanwhile, Barber was among dealers working with National Auto Dealer Association attorneys to try and create an appeals process for Chrysler to use to reconsider the closings, despite Chrysler Vice Chairman Jim Press' insistence Thursday that the decision is final.

Despite the grim news, Lunt remained confident that his dealership would survive.

"We're going to get through it," he said. "We will continue, just for the sake of us and our people. We've been in business for 75 years."

The dealership could still sell Dodge cars and trucks, and Lunt said a switch to used-car sales might "get us through." Employees have been told there won't be layoffs.

Lunt said he did not speak with Chrysler officials Thursday.

"We're just kind of in the dark," he said. "We're trying to find out whether we can get off the list."

Utah dealerships being eliminated by Chrysler:

Barber Bros. Motor Co. Inc, Spanish Fork

Cutrubus Motors Chrysler Jeep, Layton

Lunt Motor Co., Cedar City

Painter Chrysler-Dodge-Jeep, Nephi

Painters Sun Country Chrysler Inc., St. George

Parkway Motors, Cedar City

Robert H. Hinckley Inc., Ogden

Rocky Mountain Chrysler Jeep, Ogden

Tri-State Motors, Cedar City

Weese Motors, Tremonton

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