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Alley's and Don Hill are on Chrysler's closure list, but don't count them out yet

Sharon Hayes • May 14, 2009 at 12:00 AM

KINGSPORT — Two Kingsport Chrysler dealerships — Alley’s Chrysler Dodge and Don Hill Jeep Eagle — are targeted for closure.

But don’t count them out just yet.

Documents filed in bankruptcy court in New York on Thursday list dealerships across the country that are targeted for closure as part of Chrysler’s restructuring plan. In a motion filed with the bankruptcy court, Chrysler — under the direction of a government automotive task force — said it wants to shed 789 dealerships by June 9.

The automaker can’t actually close a dealership — it doesn’t own them. But it can decline to renew dealer contracts and stop shipments of new cars to dealerships.

Chrysler Vice Chairman Jim Press said Thursday the list of dealers is final, and there will be no appeal process.

However, the list must be approved by the bankruptcy judge. A hearing is scheduled for June 3 in U.S. Bankruptcy Court in New York.

Of all the Chrysler auto stores in the Tri-Cities region, only the two Kingsport dealerships are on the list.

Doug Alley said he’s disappointed that his dealership, which was started by his father in 1949, was targeted for closure. He said his company plans to fight the plan.

“Based on our history with Chrysler, and the fact that us and Don Hill are both on the list, I don’t think the factory is going to not want to be in the Kingsport market,” Alley said.

In the meantime, Alley said his dealership will continue business as usual.

“We’re assured by the factory and the bankruptcy court that until the process runs its course, it’s business as usual. We’re here, we’re selling cars, we’re doing warranty work, we’re selling parts,” Alley said.

“And we feel optimistic that we can mount an appeal and get off of the rejected list and onto the accepted list.”

At Don Hill Pontiac Jeep Eagle, Rick Hill — whose father started the Jeep franchise in Kingsport in 1978 — said he’ll have to study the options for appeal.

“I just don’t know because this is a new frontier for us,” Rick Hill said. “But we’ve got other options, too.”

The Hill family knew that General Motors, as part of its restructuring proposal, planned to discontinue the Pontiac brand. So Rick Hill had already been considering other business opportunities for the company.

Kingsport Mayor Dennis Phillips said the list was put together under the direction of the automotive task force appointed by the federal government. And that sets a bad precedent for American business, he said.

“It is a very dangerous and serious situation when the federal government through this automotive task force is able to determine where the free enterprise system is allowed to work. And by pulling dealerships, that’s exactly what they’re doing,” Phillips said.

“I can’t imagine in the short time that this task force has been appointed how they have any idea where Kingsport, Tennessee, even is, much less anything about the business climate or anything else that you need to make correct decisions.

“The message here is — it appears that the federal government can dictate just about anything they want to. We just cannot in the United States allow that to happen.”

Kingsport City Manager John Campbell said auto sales represent a significant portion of the city’s sales tax collections. Plus, auto dealers are typically big contributors to community events and activities.

“And certainly when you have dealerships that have long histories as those in Kingsport, they’ve done so many things over the years, and in many cases they’ve given significant dollars to major capital investments that in many cases we didn’t even know about,” Campbell said.

Phillips said Kingsport city officials plan to help the local dealerships in any way they can.

“We will go anywhere we need to go and do anything we need to do to help them win this appeal to keep their dealership,” Phillips said.

General Motors is also expected to close dealerships across the country as part of a restructuring plan. Phillips said he hopes no other Kingsport dealerships are targeted.

“I just cannot imagine the thought process that has gone into making these decisions,” he said. “It’s a new day for the automobile industry.”

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