Business

CHRYSLER REORGANIZATION: “I’m not happy. I’m disappointed. It’s not going to put us out of business.” -- Charley Pompey

By Jerry Lynott jlynott@timesleader.com
Business Writer
Jerry Lynott on Facebook   |   @TLJerryLynott on Twitter

KINGSTON – On the day Dodge announced it was getting out of town, Charley Pompey said he was staying.

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Dodge is getting out of Kingston, but Charley Pompey will stay in business selling, servicing and repairing used cars and trucks.

DON CAREY/THE TIMES LEADER

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• Chrysler moves to eliminate 789 of 3,200 dealers
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Pompey Dodge, a landmark on Wyoming Avenue since 1966, was one of two local dealerships listed among the 789 that bankrupt Chrysler LLC intends to cut as part of its reorganization.

The other, Ertley Chrysler Jeep Dodge, is located on Birney Avenue, Moosic.

“I’m not happy. I’m disappointed,” Pompey said Thursday. “It’s not going to put us out of business.”

Ertley will stick around as well.

“We expected this was coming,” said President Ron Ertley.

Chrysler accounted for about one quarter of his business. “It wasn’t very profitable,” he acknowledged.

The Ertley Kia dealership and used car, leasing and financing operations will remain.

The big red Dodge lettering on the Pompey building’s brick fa�ade will come down soon. Signs of things to come hung inside the showroom’s plate glass widows.

A couple of red and white “Pompey Value Certified Used Vehicles” banners faced out toward the busy West Side thoroughfare.

Chrysler, the parent of Dodge, will not renew the new car franchise, Pompey said.

“It’s going to change the way we do business,” he added.

In addition to selling used cars and trucks, the family-owned dealership that employs around 30 people will keep its body shop and service center.

Chrysler, in a motion filed with the U.S. Bankruptcy Court in New York, said it wants to eliminate the dealerships by June 9. Many of the dealers’ sales are too low, the automaker said. Just over 50 percent of dealers account for about 90 percent of the company’s U.S. sales, the motion said.

Dealers were told through letters delivered by United Parcel Service 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 as thousands of jobs are lost and taxes are not paid.

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.

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.

Likewise, Pompey, president and partner in the dealership with his cousin Chuck Pompey, will rely on his family’s name and reputation to carry on.

“We’re not going anywhere,” Charley Pompey said.

Rumors swirled about Chrysler and what the company would look like after it reorganized. Pompey said he thought his dealership “had as much chance as anybody” to be part of the plan going forward.

During the transition the new vehicle inventory will be sold off, Pompey said.

His family will continue to sell new vehicles at Scranton Chrysler Dodge Jeep. Other local dealers such as Motorworld in Wilkes-Barre and Tunkhannock Auto Mart also sell Chrysler products.

Chrysler dealerships aren’t the only ones scheduled to get bad news this week. General Motors Corp. says it is notifying 1,100 dealers that it will not renew their franchise agreements when they expire at the end of September of 2010.

In its motion, Chrysler said it has many dealerships that sell one or two of its brands, with Chrysler-Jeep dealerships competing against Dodge dealers as well as other automakers’ stores across the country.

Ertley sold all three, but the showroom’s location was the main problem.

Chrysler wants the dealers to be 15 to 20 miles apart, Ertley said. “We’re five miles from Scranton and six miles from Wilkes-Barre.”

He said in the past he was encouraged by Chrysler to locate the dealership near the midpoint between the two markets and planned to build a new showroom next year.

Some dealers are mounting a lawsuit over the cuts, Ertley said. But he won’t join. “We’re not protesting anything.”

Instead the Ertley will turn to selling the Chrysler products on his lot. He encouraged people who are in a position to afford a new car to visit given the discounts offered by automakers.

Chrysler said in its filing that dealers are not competitive enough with foreign brands. Chrysler sold an average of 303 vehicles per dealer in 2008, according to its filing. By contrast, Honda Motor Co. sold about 1,200 vehicles per dealer, while Toyota Motor Corp. sold nearly 1,300 per dealer.

Chrysler said its dealer network “needs to be reduced and reconfigured in a targeted manner to strengthen the network and dealer profitability and to achieve optimal results for the dealers and consumers.”

Chrysler 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.

The Associated Press contributed to this report.