Chrysler ends ties to 11 local dealers

Jim LaFlam and Jim Atkins received the same notice yesterday, but each processed it a little differently.

LaFlam sounded deflated - "devastated" was his word - after learning his family's Chrysler dealership in Runnemede was among 789 nationwide targeted for elimination by the struggling automaker.

Atkins at a Roxborough dealership, was defiant.

"We aren't closing our doors," said Atkins, general manager of John Flynn Chrysler Jeep, barely looking up from his computer screen as he spoke. "We can always sell something. I can sell brooms if I have to."

What he sells in the future remains to be seen. But according to Chrysler L.L.C., it won't be that company's vehicles.

Chrysler notified about 25 percent of its 3,200 dealerships nationwide yesterday that they would be eliminated as part of a restructuring plan aimed at saving the automaker, which filed for bankruptcy protection on April 30.

In a motion filed with the U.S. Bankruptcy Court in New York, the company said it wanted to sever its franchise ties with the dealerships by June 9. A hearing on the motion is set for June 3.

But the U.S. Treasury, which has given Chrysler $4 billion in federal loans in the last five months, said shrinking Chrysler's dealership network was one of many steps needed for the company to survive.

"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," Treasury said in a statement. "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."

In its filing, the Detroit company said many of the dealers' sales are too low, with just over 50 percent of dealers accounting for about 90 percent of the company's U.S. sales.

The company is also trying to reduce the number of single-brand dealerships to bring all three of its brands - Jeep, Chrysler and Dodge - under a single roof, they said. It also wanted to limit competing dealerships.

All dealers were notified by United Parcel Service letters yesterday morning whether they were to be eliminated as franchisees. Eleven area dealers were on the list, five in New Jersey and six in Pennsylvania.

David Kelleher, owner of David Chrysler Jeep at the Airport Auto Mall, was among those to get good news: He is to remain a Chrysler dealer.

"It is a very bittersweet day," he said. "I told my staff, don't go dancing in the street. We just survived a train wreck, that's all."

He was realistic about what was happening. Some dealers were being sacrificed so others could succeed.

"There really is no savings in eliminating dealerships," he said. "It is just so some of us survive in a market where there is not enough demand at the moment. It is unfortunate we are doing it on the backs of those dealers they are closing."

One of those dealers is LaFlam, who said he had been expecting the worst.

"It wasn't a total shock," he said. "We kind of had an indication that, as a single-point Chrysler dealership, this might happen to us."

He was referring to a dealer that sells only Chryslers as opposed to one that might sell other brands, such as Dodge and Jeep, as well.

"Smaller dealerships, such as ours, have been targeted for years for elimination," he said.

Knowing that did not make it any easier. The dealership, on the Black Horse Pike in Camden County, was founded in 1954 by LaFlam's father. LaFlam and his brother, Rob, have run it for 30 years.

"It is devastating for us," he said. "It is devastating for our employees . . . There is a lot of uncertainty. It's tough.

"At this point, we are going to stay open as a used-car dealer. We will just sell used cars."

Atkins, in Manayunk, steadfastly refused to let the news ruin his day.

"It is what it is," he said. "My boss said not to worry about it, just sell cars and that is what I am doing. I sold two cars this morning."

Pressed a little by a reporter, Atkins was steadfast.

"My boss' company isn't in bankruptcy, Chrysler is," he said, referring to the dealership. "I'm not going to worry because nothing has happened yet. And I don't want my sales staff worrying either. Otherwise, I'll be the only one here Monday morning."

As he spoke, a potential buyer entered the showroom.

"Listen," he said, abruptly ending the conversation, "I have to sell cars."

_{Contact Christopher K. Hepp at 215-854-2208 or chepp@phillynews.com.}