At jilted dealer, the pain is raw

Feeling betrayed by Chrysler

Staff WriterJune 9, 2009 

  • The number of new vehicle dealerships in North Carolina has dropped from 692 in 2007 to about 675. In 2007, the latest year for which there are figures available, this was the estimated economic impact of those dealerships:

    Annual sales: $20.5 billion

    Employees: 32,828

    Annual payroll: $1.51 billion

    Employees per dealership: 47

    Average payroll per dealership: $2.18 million

    Source: N.C. Automobile Dealers Association

— The big American flag that flies above the Stearns family's car dealerships on the outskirts of town can usually be seen from the interstate.

It's not there this week. It's too tattered by the wind to keep flying, says the family that owns County Ford, Stearns Chevrolet and Stearns Chrysler Jeep, which is closing today. They can't spend the $500 to replace it.

"When you're looking at closing dealers, how can I justify buying a $500 flag?" said Dale Stearns, who works at the family's fourth dealership, a Ford lot in Burlington.

The family's Chrysler dealership is one of 789 victims of this year's first U.S. automaker bankruptcy.

Like other dealers across the state -- 14 will close today -- the family is still assessing the impact that shutting down the operation will have on employees, the rest of their business and the community.

Some have already moved on; at Southern States Dodge in Raleigh last week, the old signs were already down, replaced with a temporary Nissan banner.

'They didn't even call'

There has been a Stearns selling cars in the Graham and Burlington communities since 1950, a few years after the family patriarch returned from World War II.

Now there are five, four sons and the father, with four dealerships among them. That only one is closing doesn't lessen the blow to their bottom line or to their pride.

The rejection letter from Chrysler rankled.

"They didn't even call or nothing," said Jeff Stearns, 56, who is the manager of the about-to-close Chrysler store. First there was that word, "rejection," and then no explanation.

"It's like, they're closing this dealership, but not this dealership over here," Stearns said. "It makes people ask, 'Was he doing a sorry job?'"

For dealers such as the Stearnses, who have a long history in one community, those kinds of sentiments are particularly painful.

Sitting in his office at the County Ford dealership, surrounded by pictures of P-51 Mustangs like the one he flew in the war, Carroll Stearns said this is not what he envisioned when he entered the car business six decades ago, selling Buicks in Burlington.

"I thought the world would keep on turning in the right direction," he said.

He criticized the government's decision to give financial support to the automakers but not offer compensation to closing dealers.

"Businesses are supposed to make money or get out of business," said Stearns, who at 86 still comes to work each day. "I think they should have made a better move to do it right rather than give billions and billions of dollars away."

Stearns, who purchased a 50 percent stake in County Ford in 1961, now employs about 140 people at his family's dealerships.

The family is active in the community, and the change to the business has many who depend on them worried.

Faye Boswell, who heads fundraising for Hospice of Alamance-Caswell, said Dale Stearns has supported the hospice with his time, with donations to the organization's annual golf tournament fundraiser and with intangible donations. Stearns is on the hospice board.

Dale Stearns "has helped us keep our trucks running. I ask him to come out to price a car that's been donated, and he's never too busy," she said. "The whole Stearns family has been wonderful for this community. ... Their budget is going to be cut, and we're all going to feel it."

Picking up the pieces

Yellow signs declaring "Ultimate Liquidation Event" line the road leading to the dealership. "We had 55 cars, $160,000 in parts, $75,000 of special tools we were required to buy," rattled off Dale Stearns.

It looks as though the Stearns will be able to sell some of those items to other dealers and companies. Still, Dale Stearns estimated that going out of business so suddenly would cost between $150,000 and $200,000.

And the Chrysler dealership represents about a quarter of the family's new car sales.

"It's not a minor thing," Dale Stearns said. "Financially, it's not a small issue."

Chrysler offered to help "redistribute" vehicles to dealers that remain open, Jeff Stearns said. But part of the agreement required dealers to agree to the closing of their dealerships, something many don't want to do in case of legal action.

The Stearnses have already joined a lawsuit being pursued by a group of dealers. "The bottom line is we'd like to keep the franchise, and we feel like we're entitled to," Dale Stearns said.

The Stearnses plan to turn their Chrysler operation into a used-car dealership, with Jeff Stearns still managing the operation. Most of his 25 employees are staying on as well.

'Like the firing squad'

More than anything, the family would just like more time.

"Give us 90 days, 120 days to get out in a more dignified manner," Dale Stearns said.

Many in the auto industry say that Chrysler dealers have been treated shabbily. General Motors dealers who were told to close were given into 2010 to get their affairs in order.

"It's like the firing squad," said Bill Musgrave, chairman of the N.C. Automobile Dealers Association. "It's like they put them on the line to kill them and didn't even put the blindfold on. There's nothing you can say to them."

For the Stearnses, there's not much do but to move forward in an uncertain world.

Jeff Stearns finds himself thinking about the 2000 renovation of his dealership, when he tore up the old carpet and put down the shiny new black-and-white tile that is there today.

"I thought it would last forever," he said.

sue.stock@newsobserver.com or 919-829-4649

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