Don’t count us out: Holland dealers hang on despite Chrysler’s move to shut them down June 9
Chrysler announced Thursday that it intends to sever 40 Michigan dealerships from its franchise as part of a nationwide bankruptcy filing that will cut off 789 dealers nationwide. But long-time local car dealer Wayne Elhart said Thursday, May 14, he expects Chrysler will still have a presence in Holland, despite Chrysler LLC indicating in bankruptcy files that it wants to shut down its Holland dealerships along with 37 others in Michigan.
The owner of Elhart Pontiac said the area's three Chrysler dealerships: Ver Hage of Holland Chrysler, Elhart Jeep and Elhart Dodge may have to combine under one roof, with no competing brands nearby.
Long-time Holland dealerships Elhart Jeep and Elhart Dodge said they will work with Chrysler to keep the brands in the area after learning Thursday they were among dealers that Chrysler LLC wants to eliminate by June 9.
Ver Hage of Holland, a Chrysler dealer, also was listed, according to a bankruptcy court filing today. It’s ownership, too, expects the brand will remain.
Meanwhile, Chrysler dealerships in Grand Haven, South Haven and Grand Rapids were not on the list, which surprised Wayne Elhart.
“I would hope that Chrysler would have representation in Holland because Holland is a pretty good sized market,” said Elhart, president of Elhart Pontiac GMC Jeep, 822 Chicago Drive.
He thinks Chrysler wants to pursue a marketing strategy that would combine the Dodge, Jeep and Chrysler brands into one building. Right now Chrysler is featured alongside a number of competing brands at the Elhart automotive campus.
“There can’t be anybody else in there,” Elhart said of the Chrysler plan. He said that brand accounts for about 25 percent of his business.
Norm Ver Hage, general manager of Ver Hage, said Chrysler has been pushing the idea of a combined dealership in Holland for for a number of years.
“It’s pretty obvious there will be dealer in Holland,” he said, adding he talked with corporate Thursday about it. “It’s just who will run it.”
Many of the dealers listed have low sales, the automaker said in the filing with the U.S. Bankruptcy Court in New York. Just over 50 percent of dealers account for about 90 percent of the company’s U.S. sales, the motion said.
Elhart said in a letter to customers on its Web site that Dodge sales are up 140 percent this year-to-date, while Jeep sales are up 40 percent year-to-date.
“We are committed to representing the great Dodge and Jeep products in the greater Holland market,” said the letter, signed by Wayne and his brother Jeff, president of Elhart Dodge Nissan Hyundai.
Ver Hage also said his new car sales were up 28 percent this year-to-date.
Chrysler has 3,200 dealers nationwide. Dealers were told Thursday morning through United Parcel Service letters if they would remain or be eliminated.
The move, which the dealers can appeal, is likely to cause devastating effects in cities and towns across the country. 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 spokeswoman Kathy Graham would not comment other than to say the company will notify dealers before speaking publicly. A hearing is scheduled for June 3 in U.S. Bankruptcy Court in New York to determine whether to approve Chrysler’s motion.
The company 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.
