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Posted May 15, 2009 | Copyright © The Northern Virginia Daily
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Local dealers to be affected by Chrysler closings
By Preston Knight — email@example.com
Three local auto dealers stand to be affected by Chrysler LLC’s announcement Thursday that nearly 800 dealerships are to close in less than a month.
In a motion filed in U.S. Bankruptcy Court in New York, the company stated that it wants to close 789 dealers — nearly a quarter of its stable — because of slow sales. The company is trying to reduce the number of single-brand dealerships to bring all three Chrysler brands — Chrysler, Jeep and Dodge — together.
In the Northern Shenandoah Valley, Edinburg Motors Co., at 517 N. Main St., Edinburg; Kern Motor Co., at 2110 Valley Ave., Winchester; and Parsons Chrysler-Kia, at 2525 Valley Ave., Winchester, made the list of affected dealers. Officials from Edinburg and Parsons declined comment, and Richard Kern, who owns Kern Motor, did not return a call.
Jeeps are the only new models sold at Edinburg Motors, which also operates a used-car lot and a service and repair business. Kern also has GMC and Pontiac dealerships, and Parsons also carries Kia models.
Clarke Motors, a Dodge dealership on Berryville Pike east of Winchester, closed earlier this year.
“I’m kind of taken aback,” Edinburg Mayor and Town Manager Dan Harshman said of hearing the news Thursday. “[Edinburg Motors] has always been active in the community. I was thinking it wouldn’t affect the Jeep dealers. … That’s really sad news.”
He said he hoped the used car lot remained in business since car dealerships — Edinburg Motors is the only one of its kind in town — have a way of bringing customers in to other establishments.
“[This] caught me totally off guard,” Harshman said.
Chrysler executives said the company is trying to preserve its best-performing dealers and eliminate ones with the weakest sales. More than half of the dealerships being eliminated sell less than 100 vehicles per year, they said, and account for 14 percent of U.S. sales. The company wants these dealers closed by June 9.
John Marlow, who owns Marlow Motor Co. Inc. in Front Royal, said a lot of “fine” people and good dealers stand to be affected. His dealership, which carries Chrysler, Dodge, Jeep and Linclon-Mercury, made the list of “assumed” dealers Thursday that will be a part of the new Chrysler, he said.
Marlow said there was still a lot of uncertainty surrounding the impact of Thursday’s announcement.
“For either side, it’s not the end of the story,” he said.
Chrysler Vice Chairman Jim Press said the list of affected 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,” he told reporters during a conference call.
Another local dealer that was not among the 789 listed Thursday was Woodstock Garage, which carries the Chrysler and Dodge brands in Woodstock.
“We feel very fortunate that we are one of the dealers that will be going forward with the new Chrysler,” Vice President and sales manager Rex Morrison said. “Going down the list, there’s a lot of folks that we’ve worked with in the past. It’s a very unfortunate situation some won’t be moving forward with us.”
He said he does not know if Woodstock Garage might eventually take the Jeep line from Edinburg Motors.
“So far, we don’t have a whole lot, what it means to us,” Morrison said. “I’ve got to be brutally frank, this is an extremely tough position to be in. It’s really uncharted territory.”
According to a U.S. Treasury Department statement, Chrysler faced the real prospect of liquidation a month ago, which would have eliminated all 3,200 of the company’s dealers. But a successful Chrysler-Fiat partnership, along with the backing of President Obama’s auto task force, now puts the company in a position to move forward with a plan that retains 75 percent of its dealers, the department states.
“Nobody knows what the magic wand was [to not affect us],” Morrison said. “We’re fortunate, but it’s an unfortunate situation.”
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.
The Associated Press contributed to this report.
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