STUART — It just doesn’t make sense to Bill Wallace.

Why would Chrysler close a profitable dealership in a growing area?

Why would the beleaguered automaker allow a franchise in out-of-the-way Okeechobee to remain open, while closing several on the more populated Treasure Coast?

He’s selling cars. He bought more of them than he needed from Chrysler this year, at the urging of the company’s top brass, he says.

But his Wallace Chrysler Jeep in Fort Pierce is still slated to shut down after June 9, along with 788 other dealerships that Chrysler decided to close as part of its Chapter 11 bankruptcy petition.

“We weathered this tsunami, and in America, you should be rewarded for that, not punished,” said Wallace, a third-generation dealer whose grandfather opened a Chevrolet dealership in West Palm Beach in the 1930s.

Wallace is among more than 300 dealers across the country who have joined forces to fight Chrysler’s decision. The group, called the Committee of Chrysler Affected Dealers, wants more time. More time to prove it would be a mistake to ax them.

But if Chrysler gets its way in bankruptcy court - as many industry watchers believe it will - five Chrysler, Jeep and Dodge dealers between Indiantown Road in Jupiter and Vero Beach will be among those that close next month.

The closures will leave dozens of jobs in limbo and fewer service options for the owners of tens of thousands of Chrysler, Dodge and Jeep vehicles in Palm Beach, Martin and St. Lucie counties.

Dealer aware of risk

Wallace is an optimist. If the Southern District of New York bankruptcy court won’t grant a 60-day reprieve for dealerships like his, he hopes President Obama’s auto task force will. If he’s ultimately forced to close, he aims to find jobs for most of his 61 Chrysler Jeep employees at some of the eight other franchises he owns.

“We still believe common sense will prevail before it’s all over,” Wallace said from his Stuart office this week, as Chrysler’s bankruptcy hearings continued.

Ed Napleton is a realist.

The owner of Ed Napleton Dodge on Indiantown Road in Jupiter isn’t fighting the decision to kill his local franchise and another in Chicago. He knew he was at risk because he didn’t operate Chrysler and Jeep dealerships at the same locations - something Chrysler had been pushing as part of its “Project Genesis.”

After his franchise agreement is severed, about 25 local employees will lose their jobs or get transferred to another dealership, he said. Another 50 employees will be affected in Chicago.

“We’re forced to eliminate … people’s livelihoods,” said Napleton, who is based in Chicago but owns a home in Palm Beach County. “Every one of these people has most likely a rent, a mortgage, credit card bills, family, children. … People are going to be dramatically affected. It’s bad.”

But he understands why it’s happening. Too many Chrysler dealers drove prices down too low, he concedes.

As he prepares to shut his Jupiter Dodge, he’s slashing prices on more than 100 vehicles on the lot. Discounts are as deep as $17,000 on Ram trucks, for example, he said.

To decide which dealers should close, Chrysler examined sales, market share, location and other factors, said company spokeswoman Kathy Graham.

Some dealers in rural areas were allowed to remain because of the strength of truck sales, she added.

Still, Wallace sees little advantage to forcing profitable franchises to close. He buys cars and parts from Chrysler. He pays for his showroom and service-center costs. He even springs for brochures, he said.

“We’re their customer,” Wallace said. “Basically, they’re firing their customer and, in some markets, not replacing them. It just doesn’t make any sense.”

Florida fights closings

If Wallace’s dealership closes in Fort Pierce, it will leave St. Lucie County, with a population 265,000, without any Chrysler locations.

Florida Attorney General Bill McCollum filed a motion in bankruptcy court this week, asking the judge to deny Chrysler’s request to terminate the franchise agreements. Killing the agreements “would result in a severe loss of jobs and substantial risk of driving dealers and their families into bankruptcy themselves,” McCollum wrote.

But Chrysler believes it’s essential to slim down its dealer network to emerge from bankruptcy as a more agile company with a new partner, Italian automaker Fiat.

“There is a cost associated when you have too many dealers in an area to support the market that is there,” Graham said.

When the dealers aren’t making enough money, they don’t reinvest in their properties, she said.

Still, Wallace finds it difficult to understand.

“It’s kind of ironic that this company that made such a mess of their business are being so hyper-critical of their retailers now,” he said.

Tags: bankruptcy, Bill Wallace, car, Chrysler, court, jeep, jobs, judge, layoffs, Napleton, Stuart

This entry was posted on Friday, May 29th, 2009 at 9:22 am and is filed under Economy, Fort Pierce, Hobe Sound, Martin County, Okeechobee, Palm Beach County, St. Lucie County, Stuart, Treasure Coast business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.