May 15, 2009 7:35 am US/Eastern
15 Chrysler Dealerships To Close In Md.
BALTIMORE (WJZ) ―
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Chrysler announced plans to close almost 800 dealerships throughout the country. Fifteen of those dealerships are here in Maryland.
Roberto Schmidt/AFP/Getty Images
Chrysler announced plans to close almost 800 dealerships throughout the country. Fifteen of those dealerships are here in Maryland.
Mary Bubala reports thousands of Marylanders could lose their jobs.
This time next month, 2,500 dealership workers in Maryland could be without a job.
Government bailouts mean government control. In a move backed by the White House's Auto Task Force, 789 Chrysler dealerships will be shut down. Dealers received termination letters Thursday morning.
"What we didn't sign up for is having the government come out and say, `Hey, we're going to cut 2,500 GM dealers and 800 Chrysler dealers because we think ultimately it's going to make those companies more successful,'" said Peter Kitzmiller, president of the Maryland Automobile Dealers Association.
He says shutting down local dealerships won't work.
"We're not Starbucks. Chrysler is not Starbucks. If Starbucks closes a thousand stores, they save a billion dollars immediately because those costs are no longer there. If Chrysler gets rid of 800 dealers, their costs are the same today as they were on Monday," he said.
The average dealer employs 60 people. About 50,000 people will lose their jobs, including 2,500 in Maryland.
"You're used to working in a car factory bringing home a paycheck to your family, trying to live the all-American dream, and it gets shut down. What are you going to do next? You have to do what you have to do. It's a sad statement to make, but it's a reality," said Trinee Flint, Towson.
Chrysler is not alone. In an effort to avoid bankruptcy, General Motors is expected to cut almost 3,000 of their 6,200 dealerships.
In this region the dealers that are closing include Antwerpen Dodge in Randallstown, Schaefer Strominger Dodge on Joppa Road in Towson and Heritage Dodge in Bel Air.
Bob Bell President Stuart Brooks is worried about which Maryland dealers are on that list.
"What happened with Chrysler today is criminal. The dealer gets a letter today, he's been in business 30, 40, 50, 60 years, and they are going to be out of business June 9," he said.
The cutbacks are part of Chrysler's bailout deal. The company says trimming dealerships will cut costs and increase profits. It's also trying to cut poor performing dealerships that compete for the same customers.
For consumers, it's another story.
"You will have fewer dealers in the market, you will have fewer choices for the consumer, fewer places to get your vehicle serviced. It makes no sense," Brooks said.
Adding insult to injury, Chrysler has announced they are not buying back inventory, which includes cars and parts.
Dealership restructuring is being driven by Fiat, the Italian automaker planning to take over 20% of Chrysler.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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