Chrysler Dealers Scramble In Fire Sale

June 9 Sale Deadline Leaves Many Closing Dealerships Struggling To Sell Inventory

(CBS)  Dodge dealer Greg Signore calls it an impossible task: sell off 5,000 parts and the $500,000 worth of cars on his New Jersey lot…And he has just three weeks to do it.

"It's just not going to happen," Signore said. "They have to give us more time."

After more then 40 years, Chrysler is ending its relationship with Elm Dodge. It's one of 789 dealers Chrysler is letting go.

On those 789 lots are 44,000 vehicles that dealers must sell by a June 9 deadline. The company is not buying back the cars because it's in bankruptcy, according to the Associated Press.

"I would have been in much better shape if I had done something illegal -- if I had done a fraud against Chrysler or gone bankrupt," Signore said.

"The dealers that got the termination letters in many cases were surprised by it, they weren't prepared for this and then they have really a month now to deal with the situation. It's really awful," said automotive analyst John Wolkonowicz.

A dealership near Los Angeles is stuck with 138 cars worth $4 million. The liquidation started Monday. Markdowns are occurring all over the lot with cars marked at prices that seemingly can't be beat.

For example, a Chrysler 300 is normally $37,000. The dealer is now asking for $22,000.

Dealers could lose thousands on each car, forcing some into bankruptcy themselves.

Chrysler is floating loans to its remaining dealers so they can buy unsold inventory from dealers being shut down. But with cars already sitting on their own lots for months, it's unlikely they'll be in a buying mood.

Another problem is a glut of low priced Chryslers on the market pushing down resale values. They've dropped 6 percent in the past month and are expected to fall even more as the fire sales continue.

"With these prices we're going to be having the next two or three weeks it's going to be very affordable for just about anybody," said Doug Swaim, of Star Chrysler.

[number1GI]

One of the dealers scheduled for shutdown is where I bought a car a few years ago. Had a he** uva time buying the thing. Ahhhh poetic justice.
I still remember the hassle, guys.....

[sjc_1]

"Chrysler 300 is normally $37,000. The dealer is now asking for $22,000..."

This shows me how much money they were making on these plastic boats. Chrysler did have good styling and then Mercedes got them to make this pig. It is 120 inch wheel base and plastic as far as the eye can see. I suppose someone thought it was affordable luxury....not!

[dwilson59]

does this mean I can buy a Jeep Rubicon for 20k? Please say yes

[mjlewis6]

Finger pointing aside from the Union or Management....and the government bailout, too.

The biggest finger should be pointed right at the public: Own Stock in this company? Buy their product? Demand better quality or fuel efficiency? Ever write their corporate office to change their product or what you wanted to have?

This company did not make the product it did without the public....and the LACK of management to recognize a growing problem with product alienation is the same Lack of Union members to address the issue as well.

Business sucks when everyone acts like lemmings rushing to the sea....and everyone not knowing where they are going until they get there....

[CBSknows]

Still Trying To Help In A Positive Way...

All Chrysler Vehicles That Have To Be Liquidated Now Should Either Be Auctioned Off To The Public Using BARRET JACKSON AUCTION & Other Large Public Auctions.

Make A Deal With These LARGE Auction Houses This Would Get The Most Money Out Of These Vehicles The Fastest.

Another Option That Would Work Advertise THE LARGEST RAFFLE TICKET SALE IN HISTORY ! ! Name It: "THE BIG RAFFLE" Or Whatever Advertise It NATION Wide Then Sell Off All Dead Stock. Keep Track Of All The Money That Dealers Loose And Chrysler Can Pay These Dealers Back In Dead Inventory Or Stock Options.
Offer The Same Deal With Chryslers Employees.

I Still Feel The Answer To This Problem And Other Companies That Are In The Same Situation Is To; "TEAM UP" "TEAM UP" Work Together With Other Companies. "Team Up America" This Needs To Been Done.

"GCM" "GENERAL CHRYSLER MOTORS"

"GCM" "Building A Better Future"

" GCM" "Building The Future For America"

Respectfully, Think Positive, Think Soulution ! !

Michael V. Caldwell

[jonesjep]

Chrysler sold just as many cars as Nissan but Chrylser is going under and Nissan will survive and most likely prosper. There are 2 major difference. It is obvious that the US automakers had WAY too many dealerships and of course the massive union contracts that have killed the bottom line. Chrysler sold a bunch of cars at a higher price than Nissan and still went bankrupt. The same with GM. Their average automobile price was ~$7,000 more than Toyota and they sold just as many. But yet due to MASSIVE union requirements and lack of flexibility they were not able to survive.

[omnibus66]

Chrysler, GM and Ford all thought the future was in huge gas guzzling behemoths, and they were wrong. The ego trip one gets from driving one of those monsters in now outweighed by the cost of the fuel to run it. The chickens have come home to roost.

I do feel empathy for the affected dealers, since they had no hand in designing the things that they are now trying to unload. Bankruptcy will help some of them, but in the end it is just another symptom of this economic mess that the Bush Administration strapped us all into.

Maybe the empty dealerships could be turned into homeless shelters or soup kitchens. Looks like we may need both.

[aka_KJB]

Every Chrysler and GM dealer that's been cut have been pooling their money to hire every cloud seeder, rain dancer and anything else they can think of to try and get bad enough weather to destroy the cars for the insurance money. Setting fire to them is too obvious and I don't think anybody's going to bother to steal them if they "accidentally" leave the keys in all the ignitions.

Frankly, if their cars hadn't been complete $hite for years, they wouldn't be in this mess. But that's not the fault of the dealers. The companies allowed too many dealers in the network in the first place which wound up not selling more cars but devaluing the entire dealer network. Right now, the only way to sell a Chrysler is if they hand you the keys when you walk on the lot AND give you a $500 rebate to help you find parts when the thing breaks down in a few months and you can't find parts anywhere.

[sjc_1]

"...were surprised by it,..."

Come on guys, you saw this coming a year ago. If you have not made plans you just know nothing about good management and you deserve what you get. Your employees did nothing wrong other than to trust you to manage.

[tincup356]

The crash will be coming soon,,,,job and home losses are mounting up quickly now,,,,,and those who have the graces of Washington will soon be the only ones with money to do anything,,,,those who have paid the lobby dollars,,,,,,,soon enough many Americans will abandon the idea of even owning a car as the expense will out weigh the need,,,,,try buying just one tire for a vehicle today,,,anywhere from 100-400$ each,,,,you name the repair,,,it's how many hundreds or thousands,,,,,,Insurance,,,,,,for those with falling credit the cost will rise,,,after all congress made a LAW saying they could rate our insurance according to our credit, NOT our driving record,,,,,,MORE lobby BS that "We the People " pay for,,,,that was put into law against us for the benefit of corporate America. BOTH parties have betrayed the people and now they are trying to rob us and split the masses creating those who have and those who don't.

[clip24]

Maybe they would have more luck if they caught the cars on fire at time of sale, at least that way, you could have an insurance claim on the car. that is the best outcome for a Chrysler product
Posted by mrcrosbyll at 5:24 PM : May 18, 2009
+ report abuse + permalink

Well, the insurance companies are getting ballout money that the small independent car dealers aren't getting!

[roach9703]

Holy Fiat Blackman! Obama bombed small business here. To small to succeed?