Patriot Ford in Copiague driven to bankruptcy protection

Long Island Business News, Feb 6, 2004 by Claude Solnik

Facing stiff competition, slipping sales and a troubled automotive industry, Patriot Ford in Copiague is following McDaniel Ford Inc. and Harbor Lincoln Mercury Inc. by filing for bankruptcy protection.

In its Jan. 22 filing with the U.S. Bankruptcy Court's Eastern District of New York, Patriot didn't list the amount of its debt but named Ford Motor Credit Co., Ford's financing arm for dealers, among its major creditors.

The company, owned by Ronald Melworm, is continuing to operate with a stock of new and used vehicles, but it's no longer receiving additional deliveries from Ford.

There's significant debt, said Scott Mandelup, a name partner at Pryor & Mandelup, the Westbury-based law firm that's representing Patriot. They have a substantial number of vehicles, [which] they're still selling.

Mandelup cited a number of reasons for the dealer's many difficulties, including the sluggish, post-9/11 economy, stiff competition from other Long Island dealers and an especially bone- chilling winter that's keeping people at home instead of car- shopping.

Weather affects the business, Mandelup said. Having a severe winter like we're having isn't good. We had a severe winter last year also. The bad weather can keep [customers] from coming through the door.

McDaniel Ford, a staple in Hicksville for more 35 years, filed for bankruptcy in late 2001. It is now operating under the same ownership as McDaniel Automotive Group Inc. And Harbor Lincoln Mercury, in Long Island City, filed in late 2001 and was acquired by Baron Lincoln Mercury in Bayside, Queens. Mandelup said Patriot is considering selling its franchise as well.

But other dealers insist that the Ford brand is robust and getting stronger. Business is good, said Paul Llobell, president of Sayville Ford. It's important to have a strong customer base and a large inventory. Customers today are pretty impulsive.

Still, North American revenue for Dearborn, Mich.-based Ford Motor Co. slipped to $83.6 billion in 2003 from $87.1 billion a year ago.

In explanation of that decline, Ford cited the absence of an increase in dealer stocks in 2002, unfavorable net pricing, lower market share and unfavorable exchange rates, partially offset by cost savings and a favorable mix.

Added Dan Jarvis, a spokesman for Ford Credit, Ford's auto finance arm: It's been a tough couple of years for auto sales, but we're showing signs of improvement. With any economic cycle, autos are affected by that as well. It boils down to the dealership level.

Ford, which has about 12,500 dealers under an array of brands, including Jaguar, Mazda and Volvo, operates more than 20 dealers on Long Island, which creates significant competition for the company's flagship name.

There's an overabundance of Ford dealers on Long Island, said Llobell of Sayville Ford. If there were fewer dealers, we all would do better.