Now in bankruptcy, Chrysler is expected to slash as many as 800 of its nearly 3,200 dealerships nationwide.
The question is — which ones?
At Alley’s Chrysler Dodge Jaguar Saab in Kingsport, Doug Alley said there’s lots of speculation about what could happen.
“There’s a whole lot more questions than answers at this point,” Alley said. “We haven’t heard the first official word. We’d like for them to do what they’re going to do and get it over with.”
Doug’s father, Wallace Alley, started the business — originally a Plymouth DeSoto dealership — in Church Hill in 1949, becoming the youngest franchisee in the company at age 23.
In 1960, he moved the business to Kingsport because construction of a new road in Church Hill put his company there at a disadvantage.
The Alley family business evolved over the years, and for a while the company operated two locations — its Chrysler Plymouth dealership was located where Auto Max currently is, while its other franchises — Dodge, Jaguar and Saab — were located just outside of town on Highway 11-W.
After the Plymouth brand was discontinued, the family consolidated its franchises into one location and moved the Chrysler dealership to the Highway 11-W auto store in 2007.
Doug Alley said 50,000 auto dealerships were in operation in this country when his father started in the business 60 years ago.
Today, that number stands at about 19,000 dealerships, and without doubt, the figure will continue to shrink.
Last year alone, a record 881 dealerships closed.
“So there’s been a natural consolidation of dealerships,” Doug Alley said. “This has been happening for 50 or 60 years.”
Automakers have been offering big incentives to try and entice car buyers back to the lots. Chrysler for instance just wrapped up an employee pricing deal on May 5. And now it’s offering other carrots such as consumer rebates and dealer cash. Doug Alley said customers can get nearly $10,000 off the price of some new cars.
The incentives are helping for some dealerships.
“We’re certainly not breaking any records, but our business has been improving a little bit recently,” Doug Alley said.
He said business has actually picked up since Chrysler declared bankruptcy. As part of the restructuring plan, the government has said it will stand by the automaker and support warranties on Chrysler vehicles.
“It’s in our interest to support our factories and sell as many as we can, as fast as we can. That’s what we’re doing until we know otherwise,” Doug Alley said.
His father, who turns 83 in July, still comes to the dealership every day. Wallace Alley said he believes the Chrysler bankruptcy will be temporary, and the company will emerge a strong player once more.
“We don’t believe and certainly hope this is not the end of it,” Wallace Alley said. “We’ve been there with them a long time, so we’re pulling for them. But we’ll be here either way.”
Doug Alley said the waiting is perhaps the hardest part.
“It’s kind of like when Eastman (Chemical Co.) made their announcement in March that they were going to lay off 200 or 300 people, and all 7,000 (employees) out there thought it was them,” Doug Alley said. “It’s sort of like that now for Chrysler dealers. They haven’t told us. So at this point, we just don’t know.”