Local Chrysler dealer to lobby in D.C.

By Don Shilling

An automaker’s bankruptcy could force its dealerships to close, dealers say.

An Austintown car dealer is carrying a dire warning to Washington this week.

Chuck Eddy said his Mahoning Avenue Chrysler dealership and many others would be in jeopardy of closing if the automaker filed for bankruptcy.

Eddy and other Chrysler dealers are meeting with lawmakers on Capitol Hill to push for loans to the Detroit automakers so they can continue operating.

“I don’t like using the word ‘bailout.’ This is not a bailout,” Eddy said Monday during a conference call with reporters.

The automakers are seeking bridge loans to carry them over until credit markets open up, Eddy said. He noted that Chrysler received a federal loan in 1979 and paid it back early with interest.

Eddy, who owns Bob & Chuck Eddy Chrysler Dodge Jeep with his father, is one of the leaders of the lobbying effort because he is the Chrysler representative to the National Automobile Dealers Association. Thirty other Chrysler dealers are coming to Washington to put pressure on members of the House and Senate.

“This could have a huge local impact,” Eddy said.

He and two dealers on the call said more than auto manufacturing jobs are hanging in the balance. They said Chrysler dealers employ 140,000 people nationwide and generated $105 billion in revenue last year.

Eddy said the dealerships provide pay and health-care insurance to employees, plus they spend money with area businesses and donate to charitable causes.

Jim Arrigo of Arrigo Dodge Chrysler Jeep in West Palm Beach, Fla., said people who are against the automaker loans don’t understand the widespread impact of a bankruptcy filing.

The dealers said dealerships would close if there were a bankruptcy, even if the automaker said it was going to reorganize and continue operating.

Eddy said car sales in the Mahoning Valley are driven by incentive programs from the automakers. If an automaker cut back on incentives while reorganizing, sales would drop drastically, he said.

Hayden Elder of Elder Chrysler Dodge Jeep in Athens, Texas, said that a bankruptcy filing could upset the industry. If an automaker’s suppliers are owed money but don’t receive it because of a bankruptcy filing, they could be forced into bankruptcy themselves, he said.

Chrysler, Ford Motor Co. and General Motors Corp. tend to rely on the same suppliers, so they all would be hurt if bankruptcies start to occur, he said. All three of the companies could collapse, he said.

David Regan, NADA vice president of legislative affairs, said the auto industry cannot reorganize and cut its costs in bankruptcy as the airlines have done. There are many suppliers who would be hurt, and many consumers who would not buy vehicles from a company in bankruptcy because they would be concerned they couldn’t service the car later, he said.

The dealers also said they are lobbying for federal loans for the automakers’ financing units, including Chrysler Financial. These companies have been caught in the credit crisis like banks, but there is no plan to provide them with money so that they can make loans, the dealers said.

A lack of financing possibilities is preventing many consumers from buying vehicles, they said.

shilling@vindy.com