Chrysler, GM Dealers Nervous After Chrysler Files For Bankruptcy

In his speech to the nation, President Barack Obama said he didn’t expect Chrysler to be in bankruptcy very long.

The company has agreements to reduce costs from suppliers, labor, and most bondholders.

The President said because of those sacrifices, Chrysler’s on again, off again deal with Fiat, the Italian car maker, was back on.

I am pleased to announce Chrysler and Fiat have formed a partnership that has a strong chance of success. It’s a partnership that will save almost 30,000 jobs at Chrysler, and tens of thousands of jobs at supplier, dealers and other businesses that rely on this company.

This deal may save a few dealerships because they’ll be able to sell small, economical Fiat cars.

But New Hampshire dealers still have reason to worry.

Corporate officials want to reduce the number of dealers by as much as 50%.

Larry Greene of Roberts Chrysler, Jeep Dodge in Peterborough says Chrysler’s bankruptcy changes everything for him.

All the dealer agreements are now null and void. So Chrysler can come to any dealer and say, we don’t need you anymore. So there’s some uncertainty amongst dealers but I think, as a company I think it ensures their success and their future.

General Motors dealers are suffering from the same uncertainty.

GM has not yet had to resort to bankruptcy court, but that could happen in 30 days.

Federal officials have set a deadline to see the company’s new plan for the future.

In the meantime, GM officials have indicated they’re looking to close at least 40% of their nationwide dealer network.

Peter McNamara heads New Hampshire’s Automobile Dealer Association.

He says forced dealer closings could help further choke New Hampshire’s economy by eliminating over a thousand jobs.

Car salesmen, technicians, office people. on average new car dealers employ about 42 people and the average wage is about 50 thousand dollars. So these are really good paying jobs that are going to hit NH with the loss.

McNamara also says the dealers will be handcuffed by Chryslers’ and possibly GM’s bankruptcy.

Dealers who lose their manufacturers are also prohibited from selling their remaining new cars to customers.

It’s illegal for them to sell it publicly and they’ll have to go auction to sell the vehicles. And the dealers that have done that have gotten really slaughtered at auction, the vehicle prices.

GM is planning to shut down its Pontiac brand, and sell off or close its Saturn, Hummer and Saab brands.

Gary Blake has owned a Saab dealership in Exeter for 37 years.

He says unless GM sells Saab, his business could be shut down.

Blake says that plan makes little sense to him because dealers like him pay for nearly everything.

We own our own real estate. We have our own employees. We pay the shipping of the cars is included in the cost of the car. All the advertising is done by us. The signs, they send they sell to us. All the tools, special tools, all of the training, we have to pay for.

GM officials have not indicated whether they’ve found a buyer for the Saab division.

But the company has said it intends to start closing dealerships across the country starting in a few weeks.