More Bay Area car dealers closing shop

0 Comments | Oakland Tribune, Jun 22, 2009 | by George Avalos

Two more Bay Area auto dealerships, Dodge stores both headed by Glen Hartzheim, have closed their doors -- at least temporarily.

In contrast, Hartzheim Dodge in Hayward was manned only by a security guard in the early afternoon on Monday.

The Hartzheim lot on Mission Boulevard was filled with vehicles. But the showroom was empty, the service and parts departments were vacant behind a barbed wire fence. The sales offices were abandoned. Phones in the dealership rang repeatedly, but no one answered. Vehicles blocked access to the lot.

"The Dodge dealership is closed," said Greg Jones, Hayward's city manager. "We understand that it is part of the overall Chrysler consolidation."

The Hartzheim dealership on Capitol Expressway in San Jose closed a few weeks ago.

"It's disappointing for our community," Jones said. "It's a tough thing to watch. This is upsetting and frustrating."

In early May, Chrysler filed for bankruptcy then emerged from bankruptcy in a swift resolution that enabled the iconic American automaker to sell itself to Fiat. Chrysler listed $6.9 billion in secured debt.

As part of the bankruptcy, Chrysler won permission to terminate the franchises of 789 dealers nationwide. But a bankruptcy document did not list Hartzheim's dealerships in Hayward or San Jose among those dealers that the failed automaker intended to jettison.

The Chrysler termination list included five in the Bay Area and two the East Bay. Chrysler has ended its franchise agreements with Bay Bridge Chrysler Jeep Dodge in Oakland and Livermore Chrysler Jeep. The Livermore dealership is staying open, though, because its primary retail sales are of Ford vehicles.

Chrysler also decided to terminate its agreements with three dealerships in San Mateo County, bankruptcy papers show.

Separately, the near-term status of another East Bay dealership, Stead Chevrolet Cadillac in Walnut Creek, was unclear, but it remains open.

Officials with Stead Chevrolet didn't want to discuss the status of that Walnut Creek dealership amid reports it has recevied a letter from GM changing the franchise's status.

"I don't want to comment," Corby Stead, the dealership's general manager, said Monday.

In recent weeks, auto dealers selling brands manufactured by General Motors have received letters from GM that fall into multiple categories, according to multiple GM dealers in the East Bay.

The various letters or other forms of communication have told dealers that:

-- Their GM franchises are being terminated,

-- Their GM franchises are being continued, subject to certain conditions,

-- Their GM franchises are being continued, subject to certain conditions, with no major new conditions attached.

-- Their GM franchises are being continued, but they could no longer sell certain brands.

GM says it will terminate 1,100 dealers, including 65 in California. The automaker has declined to provide a dealership-by- dealership status report.

"We're not going to be alone in losing dealers," Jones, the Hayward city official, said. "Other cities are losing them. It's the nature of the auto industry and the shakeout it's going through."

Reach George Avalos at 925-977-8477 or gavalos@bayareanewsgroup.com.