COLUMBIA — Twenty-seven Chrysler dealerships in Missouri were on the list of eliminations filed in bankruptcy court Thursday, including Columbia’s Dodge City Motors.
Chrysler LLC wants to eliminate roughly a quarter of its 3,200 U.S. dealerships by June 9, saying in the bankruptcy filing that the network is antiquated and has too many stores competing with each other.
Columbia
Dodge City Motors owner Larry Estes was surprised by the news, but plans to keep his business of approximately 45 employees at 1300 Vandiver Drive open.
"Hyundai is still here and Mahindra diesel trucks will be arriving in September," Estes said.
Chrysler
informed business owners of the cuts before the list was revealed, but
Estes said they made it seem like the only retailers being dropped were
the ones losing money. Estes said his business is paid for 100
percent.
Estes's relationship with Chrysler was rocky even in the beginning.
Twenty-three years ago, Estes bought out the University Chrysler dealership.
Chrysler then made Estes split his business into two separate locations
and take on a partner, essentially putting him into debt.
"They took about 50 percent of my business and gave it to someone else in the same town," Estes said.
Chrysler, in a motion filed with the U.S. Bankruptcy Court in New York, said it wants to shed 789 dealerships by early next month. Many of the dealers’ sales are too low, the automaker said, with just over 50 percent of dealers accounting for about 90 percent of the company’s U.S. sales.
A hearing is scheduled for June 3 in U.S. Bankruptcy Court in New York for a 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.
The 3.5 million customers who purchased vehicles from the affected dealers will be notified about the closures and their warranties will still be honored, said Vice President Steven Landry.
Chrysler sold an average of 303 vehicles per dealer in 2008, according to its filing. By contrast, Honda Motor Co. sold about 1,200 vehicles per dealer, while Toyota Motor Corp. sold nearly 1,300 per dealer.
— Associated Press writer Dan Strumpf contributed to this report