Chrysler to close four valley dealerships

staff and wire reports

Published Thursday, May 14, 2009 | 11:07 a.m.

Updated Thursday, May 14, 2009 | 2:26 p.m.

Economy claims another Las Vegas auto dealership (5-13-2009)
Economy forces Centennial Hyundai to close its doors (4-1-2009)
Economy claims Las Vegas auto dealership (2-27-2009)
Chrysler seeks $9B of gov't aid in viability plan (2-17-2009)
Dealer closes; town feels pain (2-2-2008)
Why should Nevada care about the automakers? (11-21-2008)
Bill Heard closes 13 dealerships, including Vegas locations (9-24-2008)

Chrysler

Chrysler LLC wants to close four of its valley dealerships as part of a plan to eliminate roughly a quarter of its 3,200 U.S. dealerships by early next month.

Local dealerships included in the proposed closures are United Dodge, 5750 Sky Pointe Drive; United Chrysler Jeep, 3250 E. Sahara Ave.; Marsh Chrysler Jeep, 8555 W. Centennial Parkway; and Integrity Chrysler Jeep Dodge, 6770 Redwood St.

Chrysler said in a bankruptcy court filing Thursday that the network is antiquated and has too many stores competing with each other.

The company, in a motion filed with the U.S. Bankruptcy Court in New York, said it wants to eliminate 789 dealerships by June 9. Many of the dealers' sales are too low, the automaker said. Just over 50 percent of dealers account for about 90 percent of the company's U.S. sales, the motion said.

Dealers were told Thursday morning through United Parcel Service letters if they would remain or be eliminated.

Integrity announced yesterday that it would be closing this month regardless of Chrysler’s announcement.

The closures will leave Chapman Chrysler Jeep and Towbin Dodge as the only Chrysler dealerships in the Las Vegas Valley.

The move, which the dealers can appeal, is likely to cause devastating effects in cities and towns across the country as thousands of jobs are lost and taxes are not paid.

A hearing is scheduled for June 3 in U.S. Bankruptcy Court in New York to determine whether to approve Chrysler's motion.

The U.S. Treasury Department released a statement on Chrysler's move to close hundreds of dealerships, including the four in Las Vegas, saying that it was part of the auto dealer's plan for some time to restructure its finances.

"We understand that this rationalization will be difficult on the dealers that will no longer be selling Chrysler cars and on the communities in which they operate," the statement said. "However, the sacrifices by the dealer community -- alongside those of auto workers, suppliers, creditors, and other Chrysler stakeholders -- are necessary for this company and the industry to succeed. And a stronger Chrysler, supported by an efficient and effective dealer network, will provide more stability for current employees and the prospect for future employment growth."

Chrysler is planning to move forward to keep 75 percent of its dealers, representing 87 percent of Chrysler sales.

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.

Chrysler dealerships aren't the only ones scheduled to get bad news this week. General Motors Corp. says it is notifying 1,100 dealers that it will not renew their franchise agreements when they expire at the end of September of 2010.

In its motion, Chrysler said it has many dealerships that sell one or two of its brands, with Chrysler-Jeep dealerships competing against Dodge dealers as well as other automakers' stores across the country.

"In addition, as suburbs grew and the modern interstate system continued to evolve, longstanding dealerships no longer were in the best or growing locations," the company said in its filing. "Many rural locations also served a diminishing population of potential consumers. Some dealership facilities became outdated. Other locations faced declining traffic count and declining populations."

Chrysler said in its filing that dealers are not competitive enough with foreign brands. 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.

Chrysler said its dealer network "needs to be reduced and reconfigured in a targeted manner to strengthen the network and dealer profitability and to achieve optimal results for the dealers and consumers."

Chrysler has received $4 billion in federal loans and has been operating in bankruptcy protection since April 30. Its sales this year are down 46 percent compared with the first four months of last year and it reported a $16.8 billion net loss for 2008.

Discussion: 14 comments so far…

By jaesun

5/14/09 at 11:41 a.m.

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good. I almost think they should do more, as does GM, to a level around that of Toyota (~1500). sucks for those getting closed, but for those staying open, they will benefit from this. now once they close the dealerships, they just need to make the cars more appealing to the public and build better cars and then they can possibly stand a chance at surviving for good
By Bertsos

5/14/09 at 12:55 p.m.

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With the closings, also goes the buyers opportunities to shop around for pricing and deals........with only one dealer in town, there's less incentive for that car dealer to make price adjustments or incentives.
By RickHLV

5/14/09 at 1:55 p.m.

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Has anyone thought about the poor individuals who will be joining the ranks of the unemployed here in Vegas alone? If each dealership employs 50 people that is an additional 200 families placed in financial jeapordy. The dealerships which will remain open are probably fully staffed, or very close, making it very difficult for those who will lose thier jobs to find gainful employment in the field for which they have been trained. Anyone who says it is a good thing for these dealerships throughout the country to be closed has no empathy for the innocent employees who did nothing to cause the current situation. The people whom are truly responsible for this situation have either fat wallets, golden parachutes, or both, and will not be hurt to the extent that those who need thier paychecks every other week will be. I agree that the Big three dropped the ball many years ago, but lets think about the innocents who will be hurt the most. GM Dealerships, Ford Dealerships, Chrysler Dealerships, Toyota Dealerships, Nissan Dealerships, Hyundai Dealerships, Kia Dealerships, the list goes on ..... there's still enough competition out there to get a good deal if that's all you're worried about.
By necpa57

5/14/09 at 2:14 p.m.

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SAITTA TRUDEAU CHRYSLER JEEP DODGE located in Pahrump which I believe is still located in Southern Nevada. Can you spell "research"?
By jaesun

5/14/09 at 2:21 p.m.

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oh please. lets see, chrysler slims down their dealerships in hopes of become a leaner company in order to get some profits, or continue on their downward slope, and go completely bankrupt and plenty more people lose their jobs in the end.

i almost wonder how they even survived, considering they sell less cars than toyota, yet have more than double the number of dealerships of toyota (or 4x in the case of GM).

oh, and 1 of those 4 dealerships was closing regardless of the announcement.
By reg373

5/14/09 at 3:41 p.m.

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Jobs is why Washington approved the bailout, which has been too little too late. I think the brands like Pontiac should be split off into separate employee-owned companies -- found a cool site; Balkingpoints ; incredible satellite view of earth
By formervegas76

5/14/09 at 6:19 p.m.

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stop these darn imports, if we don't start standing up for the american worker we'll be mexico real soon. i'd rather pay $200 more for a tv, $50 more for a ac, $20 more for a digital canera, so on. cheap crap=cheap jobs. enough already.
By Harley

5/14/09 at 8:44 p.m.

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A reminder that failure is a human element.

Let free market capitalism live or die, may the strong survive.

The best teams should win.
By CynicalObserver

5/14/09 at 10:56 p.m.

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"SAITTA TRUDEAU CHRYSLER JEEP DODGE located in Pahrump which I believe is still located in Southern Nevada. Can you spell "research"?"

Come on. Nobody from Las Vegas is going to drive to Pahrump to buy a Chrysler, Jeep or Dodge.

Pahrump is not in "Southern Nevada". It's a 1 1/2 hour drive over the mountains to never never land, as in normal people from Vegas never never go there.

I suspect the comment about the Pahrump dealer was just an attempt at a free ad.
By necpa57

5/15/09 at 12:10 p.m.

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No, this is NOT an attempt at a free add. I was stating a fact that there is another Chrysler dealership in Southern Nevada. The fact is that I can travel from Pahrump to Las Vegas in appproximately 40 minutes. If we use your twisted logic, Boulder City is not located in Southern Nevada because of the travel time it takes from the far end of the valley. In addition, plenty of Las Vegans have moved to Pahrump in the past few years.
By facts

5/15/09 at 3:26 p.m.

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REMEMBER THESE ARE "PROPOSED CLOSURES". Support your local Las Vegas dealership. As it stands UNITED DODGE is still open. Please support their employees, who are your local friends and family members, by servicing your vehicle or purchasing a vehicle from United Dodge today! As the President of the United States urged the nation only 2 weeks ago to Buy American vehicles!
By afveteran

5/15/09 at 10:42 p.m.

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I don't want to see any dealership closed, period. It's bad for us to have little choice in choosing a car to buy and where to buy it.
By rumrunner

5/16/09 at 9:31 a.m.

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He gave them OUR tax dollars to bail them out,and now they are gonna close thousands? I want to thank all those whom voted Obooma into office.He hasnt even begun to screw over the american public yet!
By 2UALL

5/16/09 at 10:31 a.m.

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When is OBAMA going to fix this problem? what is the problem with our government? If the OBAMA administration cant make money fast enough why dont they make more machines that produce it?
The government could then give us the cash and we would all run down to the CHRYSLER and GM dealers and by their vehicles. BIG GOVERNMENT FIXES EVERY THING!!!!!!. Or all the dealers across the country should join "UNIONS" and that would surley bring up sales at all of the dealerships, after all "UNION WORKERS" are the most productive and cost effective employee's that society has to offer. ("GO TEAMSTERS")
What happened to free market enterprise? Where only the strong survive? Why is it that we as tax payers are paying for these weak and inefficiant companys? These companys have dug their own grave and I say bury them face down and let them dig their own way out!!!!. I for one buy from strong companys that provide good service and good products(like Wal-Mart) if You know what I mean!!!! They keep prices down and ford, a company that is not borrowing our tax payer money as of yet!!!. If all of these dealer employees only had card check in effect before this econimy took a dive they would have nothing to worry about,The UNION'S and THE GOVERNMENT would surley take care of them and the rest of us would pay for it!!!!!