Dealer fights closing

Frederick Chrysler of Boardman joins others in appeal

By DON SHILLING

VINDICATOR BUSINESS EDITOR

BOARDMAN — Bob Frederick II hopes the closing of his Chrysler dealership will be overturned and he can proceed with a $1 million plan to move his dealership across the street.

Frederick said he is part of a national group of dealers which has filed an objection in bankruptcy court to Chrysler’s plans to close 789, or nearly 25 percent, of its dealerships.

Leaders of the group are in Washington presenting their case to President Barack Obama’s auto task force that closing dealerships will hurt Chrysler, not help it.

Frederick said he was shocked to learn last week that his franchise rights were being terminated June 9, while smaller dealerships in Columbiana and Salem were kept open, as was Bob & Chuck Eddy Chrysler in Austintown.

Having only one Chrysler dealership in the immediate Youngstown area wouldn’t be good for customers, Frederick said.

“Friendly competition is good,” he said.

Frederick said his dealership met all of the criteria set forth by Chrysler, including having all three of its brands and having a high sales volume.

He even had been approved to start remodeling work June 15 on the former Chevrolet dealership across Market Street. He had planned to move his dealership there by Oct. 1.

“This whole thing has to be an oversight. What else can it be?” he asked.

He said he thinks the auto task force is operating on a misunderstanding. It looked at foreign automakers, which have fewer dealers in the U.S., and decided U.S. automakers should copy that, he said.

He claims, however, that removing dealers from areas such as Boardman will send shoppers to other brands and not make remaining Chrysler dealers stronger.

Besides, the closings will not save Chrysler any money, he said.

“We cost Chrysler nothing. We pay for everything,” he said.

The dealership pays Chrysler $650 a month for its sign, at least $2 for every sales brochure, between $50,000 and $100,000 a year for training and large amounts to buy tools for the service department.

Frederick said he has several plans if he fails in retaining his franchise, including operating a used car dealership at the location across the street and maintaining his body shop and service departments.

Ed Montgomery, the head of the President’s auto task force, spoke with Ohio reporters on a conference call Wednesday that was organized by U.S. Sen. Sherrod Brown, D-Avon Lake.

While Brown said he has asked Chrysler and GM for better explanations of why they are closing dealers, Montgomery only said that federal agencies will help dealerships and their employees with retraining.

Montgomery was to visit Dayton, Toledo and Twinsburg today and Friday because those communities have been hit hard by cutbacks at auto plants. He said he could visit other Ohio cities on later trips.

Montgomery said he wants to encourage auto communities to take advantage of an expected boom in advanced manufacturing and alternative energy, such as fuel cells and wind power. Federal agencies have grants and loans for companies that want to enter these industries and they have retraining money for workers, he said.

Brown said he directed Montgomery to areas in Ohio that have been hit hard by auto cutbacks. Brown said he is hopeful the GM Lordstown complex will rebound with the introduction of the Chevrolet Cruze next April.

When asked about the Cruze, Montgomery said, “We need to have a strong GM and we need GM to get into new kinds of cars for the future that are fuel efficient and have Americans producing them.”

shilling@vindy.com