Several local Chrysler dealerships avoided the ax and will remain open despite the auto giant’s decision to close nearly 800 of their peers nationwide.
On Thursday, May 14, Chrysler sent letters to 789 dealerships across the nation – including four in Long Island – that announced the company’s intention to eliminate their dealer agreements. However, their Queens counterparts – Bayside Chrysler, Star Chrysler, and Major World – will stay open for now.
“We are okay,” said Steven Koufakis of Star Chrysler in Queens Village in a relieved but concerned tone of voice.
“With Chrysler’s 790 and General Motors’ 1,200 dealer closings, that’s about 2,000 dealerships out of 19,000 dealerships nationwide. That’s 11 percent in one day! And with each dealership possibly employing 60 people each plus all the vendors and local stores that depend on the dealership, that’s almost 120,000 jobs lost,” Koufakis said.
Koufakis explained that Chrysler used a five part criteria to decide which dealerships to keep open that included whether the dealership carried all three brands – Chrysler, Jeep and Dodge; if the facility had been recently upgraded with the new corporate look; if the dealership still had money in the bank; if the dealership shared showroom or franchise space with another car maker; and whether the dealership had met its sales objectives.
Star Chrysler met the criteria despite sales falling 20 percent year to year because they were still ahead of the 50 percent drop that other Chrysler dealerships have experienced in the last year.
Major Chrysler’s President Bruce Bendell, who along with Koufakis participated in a conference call on Friday, May 15 with Chrysler, said, “Chrysler said that, as a new and smaller company, they will end up having less product. So they had to restructure so that the dealers can sustain themselves.”
“For the remaining dealers this means less competition,” said Bendell, who will have to close one dealership in Orange, New Jersey. “But not in the metro regions. Here in Queens we were not affected.”
Though both Star Chrysler and Major Auto were optimistic about their fate before Chrysler’s announcement, they still worried about the lack of credit in the market.
At Major Auto, located in Long Island City, “we’ve consolidated job responsibilities” and have had “some layoffs.” Bendell also added that they’ve had to “finance more people on our own because of a lack of credit.”
“I still don’t see things getting better. Banks aren’t lending. In the past banks would lend to anyone. Now people who deserve a bank loan aren’t getting it,” said Koufakis, whose staff agreed to work four instead of five days to avoid layoffs due to the slowdown in car sales. “My brothers and I think about our 350 employees [total across the car franchises], their wives and their kids and we realize that our decisions affect about 1,500 lives.”
Though Chrysler will keep 2,392, the eliminated dealerships represent about 14 percent of Chrysler’s sales volume, said a company press release. The dealerships will close effective June 9.
The Queens Courier reached out to Bayside Chrysler, but they declined to comment.
In Long Island Chrysler will close Eagle Auto-Mall in Riverhead; Island Jeep in Lindenhurst; Thomas Dodge in Port Jefferson; and ABC Motors in Valley Stream.
