NEW ORLEANS – George Maurcele, parts manager at Toyota of New Orleans, arrived at the dealership by motorboat 13 days after Hurricane Katrina hit.
He was called by his boss, Troy Duhon, to assess damage and recover any surviving computer records at the hurricane-wrecked store, still under water.
Duhon, who owns the Premier Automotive import group, holds the dubious distinction of having the most Katrina-stricken dealerships.
Four of his five dealerships were submerged in 6 to 10 feet (1.81 to 3.05 m) of water. The stores are in the Orleans parish area, one of New Orleans’ most devastated regions.
“It was sad because I’d worked so hard for so many years to create the business and then saw the storm in a blink of an eye wipe it out,” Duhon says.
The effect was widespread, he recalls. “Employees were dealing with missing homes, lost loved ones.”
Katrina struck land Aug. 29, 2005, a life-threatening event carved into the hearts and minds of many Gulf Coast residents.
“The nation saw it on TV, but people who come back here 14 months later are shocked to see it,” says Marshall Soullier, general manager at storm-ravaged Banner Chevrolet. “It was a total nightmare. It was pure survival.”
New Orleans dealers still are recovering from the most deadly and costly natural disaster in U.S. history.
Dealers are investing millions into rebuilding, using private money, loans and insurance proceeds. In many cases, 70%-80% of records were destroyed, making it difficult to prove losses.
About 280,000 consumer vehicles and 18,000 dealer vehicles were damaged in the New Orleans parish areas, according to the Louisiana Automobile Dealers Assn. More than 90% of area homes had extensive damage, driving residents away.
Estimates vary on how much business is back, especially in the ravaged New Orleans eastern coastal area. Most dealers peg that at 20%-25% since the Category 5 hurricane hit.
Duhon figures Premier’s product loss at more than $20 million and building damage at $2 million to $3 million. In his stores, vehicle sales are about 60% back, service about 45%.
His Premier Honda, Toyota and Mitsubishi stores along with three other dealerships are on the I-10 service road, where hurricane conditions converged to create a wall of water.
Premier Nissan in nearby Metairie and Premier Kia of Kenner sustained less damage. The decimated Mitsubishi store closed indefinitely “until the market repopulates itself,” Duhon said.
“The lesson learned?” Duhon asks. “Emotional management is being able to sympathize and show empathy regardless of your own personal situation. You try to key in on others’ tragic situations and reassure them things will be OK. In the end, it will be for the good.”
The hard part is finding good in the catastrophe.
New Orleans east includes the hardest hit parish areas of Orleans’ lower 9th Ward, St. Bernard, St. Tammany and Jefferson.
Bullard Ave., a once-bustling business strip, is located off the I-10 service drive, home to Advantage Ford, Lamarque Nissan, Premier’s Toyota and Honda stores and Orleans Chrysler Dodge Jeep.
Dealers still are digging out and rebuilding. Some just gave up. Lamarque is now owned by Eric Hill, a former NFL football star. The I-10 business strip is bounded by the levee-breached Lake Pontchartrain, Industrial Canal and Mississippi River Gulf Outlet.
Banner Chevrolet in Orleans parish was the first business to re-open in New Orleans East, according to dealer Rick Flick. He estimates losses at more than $17 million in products, $4 million in facility and $1 million-$2 million in parts and service losses. He says 650 new cars, 120 used and 80 customer cars were lost.
An overarching desire soon was in place. “Ours was: Let’s get back, let’s get in touch with (missing people); let’s get it rolling again,” Flick says.
The 34-year-old Banner store, about five miles west of the I-10 service road, reportedly had the most damage and loss of any single-point dealership. The facility was under 4-to-7 feet (1.22 to 2.13 m) of water. Looting was prevalent.
Flick started rebuilding with private funds and loans as insurance money came in. Walls were stripped down to metal studs. The main parts of the dealership reopened in about six weeks.
But the once $1 million-grossing parts department is still being renovated. One section bears a visible sign of a 7-ft. (2.13 m) watermark. The main sales facility was rebuilt last June.
Flick, a fifth-generation dealer, had to push buttons to get services and contractors in place. Staff used cell phones, wireless computers and temporary connections for months.
Banner, the city’s largest Chevrolet dealership and state’s third highest volume store, has seen sales slip, from 2,000 units pre-Katrina to about 1,400 now. Employee levels dipped from 155 to 110.
“Among the big needs are getting people to move back to neighborhoods and businesses to open again. Without people, you can’t do business,” Flick says.
Formerly a city with about 480,000 residents, New Orleans has shrunk to about half that. The 1.4-million population metro area is down, too.
Drive-by traffic at Banner was once about 55,000 cars a day. That’s way down, Flick says. Luckily, he says, his Kia and Ford dealerships in nearby Mandeville sustained mostly minor wind damage.
Like others, Soullier, Banner Chevrolet’s general manager, saw the catastrophe at a personal level. His home was under 9 to 10 feet (2.74 to 3.05 m) of water, and his evacuated family lived for months in Houston. He personally lived on a sailboat for about four months to keep up his duties.
After an initial upsurge in sales, Soullier says demand has slackened. “It was a false economy – early on we were replacing lost cars; the population shifted as homes were destroyed and people moved north, west and other places.”
“I thought things would move a lot faster. Maybe I was just optimistic.”
Parts of the parish areas still resemble war-torn zones that one might see in bombed-out Iraq.
Chains such as McDonald’s, Burger King, I-Hop, Lowes, RiteAid and entire shopping strips are shuttered. Some areas without street lights and full police service are under National Guard watch.
Many dealerships have gone nine months or more without basic services, such as nearby grocery stores or gas stations, mail delivery, phone and Internet access. Many restaurants, schools and housing units remain closed.
A few days after Katrina, Vincent Castro, Premier’s Toyota of New Orleans general manager, began assembling a handwritten sheet with employee names and contact details. One employee led to another until every possible one was reached, some hundreds of miles away. They were told they still had jobs.
He still carries the tattered sheet folded in his wallet on the premise that you never know what might happen once you’ve been the victim of a storm of this magnitude.
Months later, management all returned, but total staffing that was once about 100 employees is down by one-third, Castro says. “We’re a lot tighter now. We find we’re able to do more with less.”
He sees a difference in how staffers interact with customers. “You see a different level of relating to customers. People sit down and talk to folks, relate to their experiences now,” says Castro. “I personally try to thank every customer that comes in.”
He says dealerships have benefited from “compassion” sales. Pre-Katrina customers are coming back, as well as new faces. Some customers drive for hours to help out. “Folks who never shopped here want to help a New Orleans company rebuild in some way,” Castro says.
“We rely on people’s good will. You really don’t take into account what dealership goodwill means until a disaster like this hits.”
About half of New Orleans area residents have not returned, but income of returning employees have risen two to three times former rates, Castro says.
Hill is the new kid on the dealer block. He wasn’t there when the storm hit. The following April he negotiated to buy the demolished Lamarque Nissan dealership, in the Orleans parish strip, from Ronnie Lamarque.
Eric Hill Nissan opened last October, but the main dealership is still being rebuilt, as Hill operates out of two trailers.
A former pro football linebacker, Hill played for the Arizona Cardinals, St. Louis Rams and San Diego Chargers from 1989 to 2000. He worked with John Grant’s Avondale Auto Group in Arizona after retiring from football.
Hill has the utmost respect for area car dealers struggling to rebuild after Katrina.
“These guys rolled up their sleeves and went to work,” he says. “They turned misfortune into fortune where possible. They had a product with a great need right after Katrina. By October, a few were up and running.”
The prevailing sentiment was “I’ve been wronged; I’ll do whatever I have to do. I tip my hat to these dealers – and other businesses.”
