12 Mass. dealerships hit as Chrysler cuts 789 outlets

Chrysler LLC said in a bankruptcy filing yesterday it plans to cut ties with 25 percent of its 3,181 franchise dealerships next month as part of an attempt to survive by downsizing and partnering with Italian automaker Fiat. The closings in Massachusetts account for 20 percent of the state's 60 Chrysler dealerships, and 2.6 percent of its 460 new-car outlets. The company said it will help the affected dealers move their remaining inventory to other franchises.

"I'm still bewildered," said Charles Bickford, owner of Westminster Dodge in Dorchester, after receiving a letter from Chrysler yesterday notifying him that the business, which opened in 1927, was on the closing list. He hoped his family's franchise might be spared because it is the company's only dealership in Boston.

"We thought sure as heck that Chrysler would want somebody representing them here," Bickford said. "I've got 50 employees, and they've been here for years and years."

But George Dimopoulos, 70, said he was not surprised to learn his family's Salisbury dealership was on Chrysler's list.

"We were ready to surrender anyway," said Dimopoulos, who estimated that the business, which he started in 1973 in Danvers, lost about $1.5 million during the last few years as sales declined. He said his two sons, who now run the dealership, were prepared for the end - one will manage the family's auto body and repair shop, while the other plans to enter the restaurant business.

"They'll do all right," Dimopoulos said.

Other dealers said they will try to reinvent themselves as used-car dealers or service centers, or attempt to rent their properties.

Chrysler spokeswoman Kathy Graham said jettisoning franchises will not save much money. Graham said the move is more about positioning Chrysler to better serve customers in an industry that can no longer support so many dealerships. Many of the franchises on the "rejected list" sold fewer than 100 cars annually, she said, or sold more used vehicles than new ones. There are 32 New England dealers on the list.

"We all know people that are laid off, a lot of family members, but unfortunately there are tough decisions that have to be made in bankruptcy and this is one of them," said Graham, who added that Chrysler's remaining dealers account for 86 percent of its US sales volume.

Chrysler's sales have fallen dramatically in recent years. The company sold 76,682 vehicles in the United States last month, down 48 percent from the same period last year. In 2008, it had sales of 1.45 million, almost a 30 percent decline from 2007.

George Magliano, an auto industry analyst with the forecasting firm IHS Global Insight, based in Lexington, said having fewer dealerships will cost Chrysler because once-loyal consumers might choose to buy from another automaker, or even reconsider whether they need a new car.

"It's going to cause the tax base to take a hit," Magliano said, though he did not estimate how much money would be lost.

New-car dealerships account for about 20 percent of the state's retail economy, according to the Massachusetts State Automobile Dealers Association, which estimated the 460 dealerships have an average of 50 employees each.

"This is an absolutely black day for car dealerships and for the public that has been doing business with these people for generations," said Ray Ciccolo, an official of the National Automobile Dealers Association and the Massachusetts dealers group.

Ciccolo owns seven area dealerships, none of them associated with Chrysler. But he does sell cars made by General Motors Corp., which wants to eliminate 2,600 of its US dealerships. A GM spokesman said the beleaguered automaker has been notifying franchise owners this week of the intended closings but does not plan to release a list. The downsizing is part of a restructuring plan that is likely to include bankruptcy. It also gives the federal government and the United Auto Workers union huge stakes in the company.

Yesterday, news of the Chrysler cuts circulated through the local auto dealer community and beyond.

Sharon resident Larry Fishman, 55, recalled that his first car - a used 1963 Chevy Impala that cost $125 - came from Westminster Dodge. "They were considered the neighborhood dealership," he said. "Unfortunately, it's a sign of the times," Fishman said of Chrysler's announcement.

Several Massachusetts dealers said they plan to push Chrysler for more assistance, and Ciccolo said both the state and national auto dealers' associations were helping them find legal representation.

"Right now we're contemplating getting some allies to help save us," said Bickford, Westminster's owner. "The mayor called a little while ago. The mayor can't believe it."

John Sullivan, of Sullivan Brothers Chrysler-Dodge in Kingston, which is also on the closing list, said, "I think there's a fight to be had."

But others, like Pete Krause of Dudley, said they will stay in business by selling different car brands. He jokingly identified himself as being from "Tri-State Toyota-Scion, formerly Toyota-Scion-Dodge." Krause said he hopes to keep all of his 40 employees.

"I sort of thought it would happen," he said of having his Chrysler franchise taken away. "But I also thought they would buy parts back and take care of the business partners who have supported them for years. So there's a little bit of a bitter taste in my mouth."

Globe Correspondent Julie Balise contributed to this report. Erin Ailworth can be reached at eailworth@globe.com.