ORLANDO – Randy Dye, who owns a Dodge dealership, is buying another at a time when cynics are countingLLC down for the count.
But Dye sees it differently.
“I’m confident in the product, in the future of the company, in the leadership of the company,” he tells Ward’s at a Consumer Bankers Assn. conference here. “It will take about five years, butwill be a powerhouse.
“I’m not a fool. I wouldn’t be purchasing another Chrysler dealership if I was concerned with Chrysler’s viability or whether it would be here next year or 30 days from now.”
Dye is on the conference program here as a dealer panelist discussing current industry events, the most recent being President Obama’s plan to provide government loans to Chrysler andCorp. while the two auto makers continue to restructure over the next 30-60 days.
“The president put an exclamation point on the fact that GM and Chrysler are important to the financial health of this country,” says Dye, dealer principal at Daytona Dodge in Daytona, FL.
He says Chrysler-owner Cerberus Capital Management LP “got the message that profit is more important than volume” and had been restructuring the auto maker toward that end when suddenly the credit crisis hit last year and knocked the company down.
The Democratic president’s message – that the domestic auto industry is too important to lose – hits home with dealers at this conference, even those whose politics lean more to the right.
Obama’s faith in the domestic auto industry instills consumer confidence, a key factor in a prospective recovery, says Russ Darrow, head of the Russ Darrow Group, based in Menomonee Falls, WI. His holdings include three Chrysler stores, down from five.
“My good Republican friends who said the auto industry should have gone into Chapter 11 (bankruptcy) don’t get it,” Darrow says. If that happened, auto companies, suppliers and dealers “would have gone down like a rock.”
Bankruptcy puts “a tattoo on a brand,” he says, blaming some of Chrysler’s drop in sales to public reaction to the prospects of an automotive bankruptcy.
President Obama says bankruptcy is not out of the question if GM and Chrysler are unable to restructure quickly enough. Dye takes that more as a warning than a looming reality. “The president is trying to restore consumer confidence,” he says. “Bankruptcy wouldn’t do that. If it happened, it would hurt.”
Dye says the U.S. government is monitoring GM and Chrysler almost too closely to over compensate for failing to adequately oversee federal aid to the financial industry.
Despite calling himself a “Libertarian Republican,” Michael Jackson, CEO ofInc., the country’s largest dealership chain, says at the conference, “I hate to say it, but we’re in such a mess, we need the government to get us out.”
Jackson describes government bridge loans to GM and Chrysler as “appropriate” and the federal stimulus package to jumpstart the economy as necessary.
“The only mistake would be to not throw enough money into this,” Jackson says of the stimulus program. “We need to get moving. Otherwise, it’s a huge train wreck.”