Early Thursday, Hoyt Sheffield looked at the UPS package in his hands with some trepidation.
It was the day Chrysler said it would announce the closing of nearly 800 of its dealerships nationwide.
Sheffield, owner of Tupelo Auto Sales, had heard from a couple of his colleagues who owned Chrysler dealerships that they were told via UPS that they were to be closed.
“I saw the red stamp on the package like they had, and my heart stopped for a moment,” he said.
But the letter inside said “congratulations,” and Sheffield was relieved.
“I hadn’t even dreamed of them closing us down,” he said. “I wasn’t too worried. Tupelo is too good of a market.”
Not so fortunate were six other dealerships across the state that got word they were losing their Chrysler brands, including Cartwright Motors in Booneville.
Cartwright sells Ford, Chrysler, Dodge and Jeep.
But owner Gary Cartwright said the news wasn’t totally unexpected.
“We had been expecting it since there were two others around us and we were the smallest,” he said.
“We’ve enjoyed being a Chrysler dealer, but we’ve been a Ford dealer for 39 years and look forward to building the brand.”
Cartwright has been a Chrysler dealer for 25 years.
“We’re still a Chrysler dealer until the plan is approved, and I still have new vehicles to sell,” he said. “I’ve got great rebates and now I’m going to have to discount even more. I’ve got to sell them.”
Cartwright’s Chrysler dealership was one of 789 that the automaker said it was ending by June 9.
The beleagured company said many of the dealers’ sales are too low, with just over 50 percent of dealers accounting for about 90 percent of the company’s U.S. sales.
Chrysler Vice Chairman Jim Press called the cuts difficult but necessary. He said the list of dealers is final and there will be no appeal process.
“This is a difficult day for us and not a day anybody can be prepared for,” Press told reporters during a conference call.
A hearing is scheduled for June 3 in U.S. Bankruptcy Court in New York for the judge to determine whether to approve Chrysler’s motion. Judges often rely on companies in bankruptcy to help determine what is in their best business interest, such as the closure of dealerships or cancellation of contracts.
Chrysler executives said the company is trying to preserve its best-performing dealers and eliminate those with the weakest sales. More than half of the dealerships being eliminated sell fewer than 100 vehicles per year, they said, and account for 14 percent of U.S. sales.
The company is also trying to reduce the number of single-brand dealerships to bring all three Chrysler brands – Jeep, Chrysler and Dodge – under a single roof, they said. It also wanted to limit competing dealerships.
“We recognize in the short term we will see some loss of sales,” Press said. “But based on the long term … the dealer (network) is key and it’s going to be very strong, powerful, with a much better financial viability.”
Cartwright said he sells more Fords than Chryslers at his dealership, and said it would be “business as usual.”
“We’re moving ahead with our business,” he said. “And we’re going to still service the vehicles and do everything we’ve always done for our customers.”
Ford, the only U.S. automaker to not accept any government funding so far, is in a better position with its products, too, Cartwright said.
“We’ve had a great relationship with Ford for 39 years and look forward to 39 more years. And more than that,” he said.
Sheffield, meanwhile, is gearing up for the “Autofest” that begins today and runs through Memorial Day at the Tupelo Furniture Market. Tupelo Auto Sales and Dossett Big Four team up for the annual event.
Thursday’s news was a temporary distraction and motivated Sheffield to sell more cars.
“I think the closures will help” with sales, he said. “We also brought another 130 used cars to sell, we’ve got additional discounts, and we think that this is a really good time to buy a car.
“We’re still in business, and I was never really worried.”
Contact Dennis Seid at (662) 678-1579 or firstname.lastname@example.org.
Dennis Seid/NEMS Daily Journal