Chrysler took a bite out of its dealer network Thursday, and the teeth were felt by two local dealerships.
Dick Smith Chrysler-Jeep on Jefferson Davis Highway in Aiken and Augusta Dodge on Gordon Highway are among 789 dealers the automaker wants to remove from its network by early June.
Chrysler LLC filed the list in U.S. Bankruptcy Court in New York in order to get a bankruptcy judge to cancel the contracts and shrink its dealer network by a quarter by June 9.
If the request is approved, Chrysler will shed 11 dealers in South Carolina and 14 in Georgia.
Augusta Dodge has been owned by Greg Helfrich since 1996. Representatives of the dealership would not comment Thursday.
The 3.5 million customers nationwide who bought cars and trucks from the affected dealers will be notified about the closures, and their warranties will still be honored, said Chrysler Vice President Steven Landry.
Michelle Franklin, 32, of Hephzibah, was in the Augusta Dodge lot accompanying her brother Jimmy Stokes as he got parts for his Dodge Magnum.
"I owned a Dodge Durango before I got my Suburban, and I was just about to check out a Charger," she said. "In my opinion, if it's not Dodge or Chevrolet, those are the only good cars."
She bought that Durango from Augusta Dodge, and she has been driving Dodge vehicles since she got her driver's license, she said.
Chrysler's decision does not mean the Gordon Highway dealership must close, but it would be prevented from selling or servicing Chrysler-made vehicles once the contract is terminated, according to information in the court documents.
Calls made to Dick Smith Chrysler-Jeep seeking information were not returned.
Chrysler indicated that it picked its weakest dealerships for the list.
"Based on both an objective and subjective evaluation, the Debtors have determined that the dealerships located in the markets at issue lack the operational, market, facility and linemake characteristics necessary to best contribute to the ongoing dealer network under current or future ownership," court documents said.
Chrysler executives said the company is trying to preserve its best-performing dealers. More than half the dealerships being eliminated sell fewer than 100 vehicles per year. Half its dealers account for 90 percent of its sales, the company said.
Chrysler Vice Chairman Jim Press told the Associated Press that the list of dealers is final and there will be no appeal process. A judge will rule on the contract terminations June 3.
For Lynn Brisson, the owner of Triangle Dodge in Graniteville, there was relief Thursday morning when she received a letter affirming her status as a dealer once the automaker emerges from bankruptcy.
"We expected it, but we sure did want to know something in black and white with all the rumors going around," Ms. Brisson said. "We did our job to suit them, and our facility was upgraded, things that make a difference, I think."
Triangle Dodge expanded its lot by 2 acres about two years ago. She said its designation with the company allows her dealership to do warranty work on Jeep and Chrysler models, filling a service gap when Dick Smith is cut from the network.
She may also soon be selling more than Dodges.
"I suspect it will open up the opportunity to get the Chrysler-Jeep. It is not confirmed," Ms. Brisson said.
Reach Tim Rausch at (706) 823-3352 or email@example.com.
GM SAYS BANKRUPTCY FILING HINGES ON $27 BILLION BOND SWAP
DETROIT --- General Motors Corp. says it likely would sell most of its assets and liquidate the rest if it has to seek bankruptcy protection.
GM made the disclosure Thursday in a filing with the Securities and Exchange Commission. It has said bankruptcy is possible if it doesn't get enough takers on an offer to swap $27 billion in bond debt for stock.
The automaker also says it could seek court approval of its reorganization plan even if creditors vote against it.
GM has offered bondholders 225 shares for every $1,000 in bonds. The company would issue 62 billion new shares and then do a 100-for-1 reverse stock split. Bondholders would get 10 percent of the company's shares under the offer, which expires May 26. But a committee representing the bondholders has counteroffered seeking 58 percent ownership.
GM has received $15.4 billion in U.S. government loans and must restructure by June 1.
-- Associated Press
Two Chrysler dealers in the Augusta area are expected to be cut by the carmaker by June 9:
- Augusta Dodge, 1886 Gordon Highway, Augusta
- Dick Smith Chrysler-Jeep, 136 Jefferson Davis Highway, Aiken
- Milton Ruben Chevrolet-Chrysler-Jeep-Toyota, 3518 Washington Road, Augusta
- Thomson Chrysler Dodge Jeep, 2158 Washington Road, Thomson
- Triangle Dodge, 1666 Jefferson Davis Highway, Graniteville
789: Chrysler dealers expected to close, including 11 in South Carolina and 14 in Georgia
3.5 million: Customers who bought cars and trucks from the affected dealers
$16.5 million: Average amount dealers spent per year in the community
WHAT TO EXPECT
So your local Chrysler dealer is slated to close, and a nearby General Motors dealer could get the ax, too. What happens if you need service on your car?
It's a natural question as the two U.S. automakers attempt to restructure in and out of bankruptcy court.
In bankruptcy court filings, Chrysler said Thursday that it would shutter 789 dealerships - about 25 percent - across the country.
GM dealers are awaiting word on which 1,100 of them will not see their contracts renewed when they expire at the end of September 2010.
If you live in a major metropolitan area, you could simply drive to another dealership for service, even if it is a few extra miles. But it might be more difficult if you live in a rural town, or in an area where there are no other dealerships.