A new game of survival for car dealers
John Reichert's Chevrolet Buick dealership has a team in Crystal Lake's Babe Ruth Baseball League. Bill Kay Auto Group is a sponsor for Benet Academy's annual golf outing. Those are among the many small ways that car dealerships have been such a part of suburban life - and one big reason we're sorry to see them taking a hit from Big Auto's recession woes.
The two were among numerous auto dealers in the area to get bad news last week.
Eight local Chrysler dealerships, Bill Kay's Naperville and Downers Grove locations among them, received word last Thursday that the automaker is revoking their franchises in June. In all, 789 Chrysler dealerships are being dropped from among the 3,200 nationwide.
Last Friday, Reichert, who also has a dealership in Woodstock, was told GM was severing ties with the 57-year-old company founded by his dad in 1952. About 1,100 GM dealers nationally got the news. Because the list was not made public, it's unclear how many are local.
Both Reichert and Bill Kay auto groups say it's too early to count them out and that they'll find a way to stay in business.
Still, last week's news is the latest reminder of how this recession can affect our towns long after we're back on the upswing.
Even if they don't face forced franchise cutbacks, towns with an "auto row" are transforming. Dealer consolidations have left empty lots along main streets. Sales are down, leaving town leaders to wonder if auto sales tax revenue ever will rebound. Jobs are on the line.
We join those on the auto company hit lists in questioning how some decisions were made. Reichert, who manages to make enough profit to employ 90 people, says he's tried to convince GM he shouldn't be judged against Illinois sales averages that fail to take into account the many foreign-car dealers surrounding him - a hurdle downstate dealers rarely face.
Sixty-eight congressmen, including 14th District Democrat Bill Foster, raised the same question in a letter to the U.S. Treasury Department's Auto Task Force, released Monday. "We need to really know why some are closing and some are not," Foster spokeswoman Shannon O'Brien said.
Even in the midst of this trauma, we have to hand it to the local dealerships on the list. They just might find a way to roll with the punches.
Employees at Bill Kay's Naperville Chrysler say they'll stay open selling used cars, plus other brands the auto group offers at other locations.
Reichert plans to investigate setting up new franchise agreements and also will rely on used car sales. He pointed out that unlike Chrysler dealers, he has 18 months to work out a plan.
"We'll be around for a while," he promised.
We hope so.