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Local auto dealers tell congressman to let survival of the fittest reign
By James Fuller | Daily Herald Staff
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Published: 5/29/2009 12:00 AM

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If local auto dealerships must close it should be because the market dictates it, not the heavy hand of the manufacturers that shutter their showrooms.

That was the key message auto dealers in the 14th Congressional District delivered to Congressman Bill Foster at a round-table discussion Friday. Foster called the session to get a better sense of how forcing local dealerships to close really affects the health and survival of their parent companies. After pumping nearly $25 billion into General Motors and Chrysler, matters fell into the hands of bankruptcy courts and local jobs soon came under threat with the promise of widespread closings.

Foster is one of several lawmakers to urge the auto companies to reconsider the closures.

Dealers and trade representatives told Foster they suspected the closures and threats of closures is only posturing by the manufacturers as they attempt to show they are willing to adopt a business model more closely resembling that of Toyota and other foreign automakers. The first order of business in that model is reducing the number of front line dealerships, presumably to cut costs.

But local dealers said closing them down will provide no positive immediate impact to the bottom lines of the domestic manufacturing companies. The local franchises own all the burden of the overhead costs of running the dealerships, owners said.

"On this site, right now, GM has no interest," said John Clark, owner of Avenue Chevrolet in Batavia. "It's all my money."

The real problem behind the failings of the domestic auto companies is the product they are putting out, said Jim Patterson, owner of Westside Dodge in North Aurora. Patterson pointed to the Dodge Durango as a prime example. Initially the SUV was a hit and they went flying off the lot. Then gas prices skyrocketed and all consumers saw in the Durango was a guzzler, leading to failure of the model.

"They are deflecting the point away from their lack of product that is competitive in the marketplace and putting it on the dealer," Patterson said.

Dealers also said it's a fallacy to believe that workers will simply find jobs on other lots when closures occur. Dealerships are already cutting back on staff.

Rob Massarelli of Richard Chrysler in St. Charles said he's already laid off 20 employees, nearly half his staff, in recent months. Despite that, he's still being pushed out of business.

Foster said he'll take the input of the dealers and weigh it against what the manufacturers can prove to determine what the best course of action is moving forward. Foster said it will be impossible in the immediate future to judge whether or not the bailout for the auto companies is money well spent.

"That you'll find out years from now in what fraction of the jobs were saved," Foster said.