WYPR: Dodging Chrysler's Bankruptcy in Germantown (2009-06-22)

The bankruptcies of General Motors and Chrysler are hitting car dealerships all over the country. Some are closing, while others struggle to survive. GM dealers have a year to sell their inventory. Chrysler, as WYPR's Bob Costantini reports from Germantown, was not so generous:

2008 Dodge Caliber and a 2004 Stratus sit in the showroom. Veteran car salesman, Kevin Domingue leans up against the Stratus:

"You don't know what tomorrow's going to bring, but I've been in this business for 17 years. You know, we're taught in this industry to overcome objectives.

Out front, a light up sign spells out Montrose, in the middle is the familiar ram symbol but the word Dodge is covered over with a plastic makeshift sign that says "automotive."

"I figured I had a fifty-fifty chance, because in this market I think there were dealers that were higher on the hit list than maybe I was.."

In mid-May, Rick Shaub got a notice from Chrysler that it was taking away his Dodge franchise. Rick is the third generation to sell cars at a dealership that got involved with Chrysler because it once sold Jeeps and American Motors cars. Back in 1987, Lee Iacocca, had Chrysler in a buying mood.

Today Rick Shaub is left with more than a dozen new Dodges. There was a fire sale through June 9th, when the franchise was terminated. The remainders cannot be sold to customers; rather Chrysler, which won't take the cars back is looking for ways to move the inventory to other dealers, with Montrose Automotive losing about two thousand dollars in profit per car.

The bitterness has left Shaub talking down the Dodge brand, a naturally tough sell in the largely affluent area between Frederick and Rockville:

"No one ever mentions product in any of these conversations. If we had products that the consumer wanted or were ranked high in Consumer Reports, we would be selling more cars in this market."

It was all about sales when Chrysler President Jim Press testified on Capitol Hill recently:

"In 2008, of the 787 discontinued dealers, 80 percent of them were below their minimum sales responsibility, which translated into 55,000 lost sales; 1.5 billion dollars in lost revenue."

Plus, as a Dodge-only dealer Rick Shaub was considered expendable:

"We have lost some money. We haven't lost it continuously. (butt w/11:31) We miscalculated how deep and how long this recession was going to be. Then we began to trim employees; trim salaries, really cut our overhead. That put us back in the black."

Shaub says there are 50 employees left, down from 65 or so, and no plans to lay anyone off at what has now become a used car and service dealership:

"Morale has been down, but I think we're over that at this point. And I think, from what we can see that we may even be better off than we were before."

Perhaps the situation will overcome Montrose Automotive. Rick Shaub thinks he can stave off bankruptcy for the family business, via other operations on the property. A van gets washed after service work

a body shop tied into an insurance claim office fixes all models

and the parts department soldiers on:

"Do they have screws in it? Check it out I didn't even look He said he didn't think it had the screws in it..."
{bring sound down under reporter track}

As it stands now, there will be two Chrysler dealerships in Montgomery County, and one in Frederick.

If Rick Shaub's Montrose Automotive survives, he says he might seek a franchise, with some other manufacturer.