Chrysler Dealer Vows A Fight To The finish

ST CHARLES, Ill, May 25, 2009; Nick Carey writing for Reuters reported that Rocco Massarelli is down but not out.

"I'm too stubborn to quit and I'm too stupid to go away," said the owner of Richard Chrysler-Jeep-Dodge in the western Chicago suburb of St Charles. "I'm going to keep selling cars and fight this to the end."

Massarelli's dealership is one of 789, out of a total of 3,181 Chrysler dealerships, with which the bankrupt automaker has said it plans to eliminate franchise agreements as of June 9.

The franchise eliminations are part of plans by Chrysler LLC, the No. 3 U.S. automaker, which has been operating in bankruptcy since April 30, to sell its most valuable assets to a new company owned by the U.S. and Canadian governments, Chrysler's union and Italian car maker Fiat SpA.

Bankruptcy Judge Arthur Gonzalez could rule as early as Wednesday on whether Chrysler can go ahead with those plans, with fierce opposition coming from dealers on the elimination list.

Massarelli said he was shocked Chrysler was ditching his franchise, a business his father founded 30 years ago.

"We don't fit the guidelines for closure," Massarelli said. "We're profitable, we've never missed a payment and we've done everything Chrysler has ever asked us to help them out."

The plan to shut off Richard Chrysler-Jeep-Dodge came May 14 despite a recent pickup in sales following a dismal 2008 fourth quarter when the credit crunch cut off potential buyers. The dealership sold 60 cars in April, down from pre-recession monthly highs of 150 cars, but inching back up.

Chrysler's sales fell 48 percent in April from a year earlier as the worst decline in U.S. auto sales in decades continued.

"The irony is we could do with more inventory right now because we're actually selling cars," said Marni McClennan on the sales floor between seeing customers. "We've had so many people coming in over the past few days it's hard to keep up."

Massarelli is stuck waiting to find out what will happen to his inventory -- Chrysler has said it will not repurchase cars from dealers -- and facing bankruptcy after June 9.

CUSTOMERS APLENTY

A steady stream of customers filed through Massarelli's showroom on Monday, which was Memorial Day in the United States -- the start of the busy summer driving months and the car-buying season.

The aroma of car wax and new leather mixed with the odor of engine oil and grease from the car service department -- a peculiar combination of smells common to U.S. dealerships.

Massarelli's showroom stands near a number of others -- including those of General Motors Corp (GM.N) and Ford Motor Co (F.N) -- on the town's main four-lane thoroughfare.

"It's not fair Chrysler wants to shut these guys down if they're making money," said John Scott, a customer of 10 years who came to look at a new minivan. His family has bought seven new cars from Richard Chrysler-Jeep-Dodge over the years. "That is not in the spirit of American enterprise."

Scott's words echoed those of an e-mail on Monday from a committee of dealers opposed to Chrysler's plans.

"Instead of allowing the free market to determine which dealers survive, Chrysler and the government are effectively playing the roles of judge, jury and executioner," the e-mail said.

Massarelli said he has around 50 new cars left, an inventory of around $2 million, plus $350,000 in car parts. Since 2006, he said he has taken more cars whenever Chrysler asked and at one point had 400 new cars on his lot worth $12 million. He bought the local Dodge franchise three years ago for $1.7 million on Chrysler's request.

"Every time Chrysler said they needed us, we were there for them," Massarelli said. "Now they won't even return my calls."

He said Chrysler Financial -- Chrysler's financing arm -- told him he may be able to sell his inventory to other dealers at a loss of around $3,000 per vehicle. If he loses the franchise, under Illinois state law he will have to sell his inventory as used cars, at a loss of around $10,000 per car.

But Massarelli said that is the least of his worries. His 20 remaining staff will be jobless and he has a $4 million mortgage on the dealership.

"That mortgage will be foreclosed on and I could lose my home," he said. "I'll be lucky to walk away with the clothes on my back.

"I'm not asking for a handout, I just want to keep running a business we've managed successfully for decades," he added.

Sales manager Art Greenslade, 63, said the plan to shut down the dealership was "horrible."

"I'll have to find another job because my 401(k) has been dismembered by the crisis and I can't retire," he said. "But I'll stay here to the end and keep pushing cars out the door.

"I aim to make a fool out of Chrysler." (Editing by Leslie Adler)