Local GM and Chrysler dealers hanging in there

Sales at local Jeep dealer have been same as or better than last year

Posted: Thursday, June 11, 2009

Bankrupt General Motors Corp. and Chrysler Holdings are closing dealerships all over the country - but not here.

Michael Penn / Juneau Empire
Michael Penn / Juneau Empire

"They didn't mess with us," said local Jeep dealer Mike Hatch. "They didn't mess with anybody in Alaska, probably because of the demographic."

Chrysler, which owns Jeep and Dodge, dropped 789 of its 3,189 dealers. GM wants to drop about 2,400 of its 6,000 dealers by 2010.

In Alaska, only Hutchings Chevrolet in Soldotna is known to be giving up selling new GMs - Hutchings, not knowing if he'd be cut, decided to end its GM relationship, according to the (Kenai) Peninsula Clarion.

Don Schrader of Focus Auto explained why he thought Alaska dealers weren't cut.

"There were never too many dealers here," he explained. Schrader does advertising for Skinner Sales and Service's Juneau and Ketchikan dealerships, which sell GM, Chrysler, Buick and Subaru.

Hatch said that sales at his Douglas dealership have been the same as or better than last year.

Jeep started as a Willys brand in 1941, and since then the marque has been transferred to Kaiser, AMC, Chrysler, DaimlerChrysler and Chrysler Holding LLC. Hatch has weathered these changes over nearly 30 years. Jeep customers, he says, tend to be loyal to the brand.

When potential customers ask him what will happen to Jeep when Chrysler sells to Fiat, Hatch says this: "Somebody else will buy it, and we'll probably still be here."

At Skinner, ad man Schrader says business is just fine. Customers are still buying cars - they just need to be reassured that their warranties will be OK. Dealers have to work harder. So does the car company, and he sees that as an incentive for customers.

"The brand is a little bit tainted right now," he said. "But that's going to play to the consumer's benefits, because they're going to really have to work to get those customers back."

"The running joke is, we're going to have a bankruptcy sale," said Steve Allwine, co-owner of Mendenhall Auto Center with his wife Karla.

Allwine exchanged his GMC franchise for a Chevrolet one over the winter, and he also sells Chryslers and Dodges. Sales are off this year, he said. He counts himself fortunate to have his Honda, Subaru and Toyota franchises.

For him, GM's bankruptcy has left more questions than Chrysler's. For GM, there is no Fiat waiting to take over. While Allwine doesn't know what GM plans for him, he did get the "participation agreement" in the mail that dictates new rules on how dealerships must be set up, how he spends his money. He's signing it.

"Almost all the dealers who have received it are signing it, because they have no choice," he said. "It's an arbitrary contract ... But if we don't like it, we won't play anymore."

Allwine said he's sticking around and even hiring a few technicians and salespeople.

"We've been here 21 years. My family's here. All my friends are here. Everything I have is here. I'm not leaving," he said.

• Contact reporter Kate Golden at 523-2276 or kate.golden@juneauempire.com.

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