Family of Chrysler Dealers Faces End
By SHARON COHEN, AP
posted: 13 HOURS 28 MINUTES AGO
HOBART, Ind. (June 13) - At the end of the 81-year marriage, the Isaksons said goodbye by turning off the lights. The partnership was over.
The Chrysler sign went dark.
It was an unceremonious finale to a four-generation bond between one family and one company, but it was not a surprise. Rob Isakson had known for weeks his dealership was on a Chrysler hit list — the cuts were part of the troubled automaker's survival strategy.
Still, when the moment arrived, he did not go gently into the night.
"It hurts," he says. "How do you put into words 81 years of your family's blood, sweat and tears? How many times did my father miss some family event ... because the business came first? And all of it is for nothing now."
It has been a wrenching few weeks, beginning with Chrysler's notification in mid-May that the family was losing its franchise. The word came in a form letter. "How insensitive is that?" Isakson asks.
Then came futile efforts — through calls and e-mails — to find why they were being dropped, even though they say their sales were better than some dealers that survived.
Last week, a judge ruled for Chrysler: The bankrupt company, having sold most of its assets to Fiat SpA, the Italian automaker, could trim about a quarter of its dealer franchises.
Isakson Motor Sales was among the dealers to go. And thus ended a proud family history.
Their ties to Chrysler go back to 1928 when two Isakson brothers who were farmers invested $5,000 in an exciting new venture: the DeSoto. They opened a showroom, in the heart of what once was booming steel country, at an auspicious-sounding intersection — Front and Center.
Over nine decades, the names of the cars changed (Imperial, Valiant, Cordoba, Horizon, Duster, Reliant, New Yorker, Road Runner, Challenger, Voyager, PT Cruiser), but the name of the dealership did not. It was the Isaksons. Clarence and Walter. Bill. Rob. Eric and Steve.
Father to son, father to son, selling cars and handing over the keys to one, two, even three generations of customers, making a go of it even in the leanest years.
"How many businesses survive their first five years, or the next five?" Rob Isakson asks, huddled in his office with his 83-year-old father, Bill, and his two sons. "We survived 81 years of ups and downs in this industry. The stock market of '29 and the Depression ... World War II and rationing, the strike years with the steel mills and we survived, the loan guarantee years, which were tough years ... and we survived that, too."
"And now," he pauses, "we're surviving but Chrysler says we're not worth keeping."
"Am I angry?" he asks, then quickly answers. "You're darn right I am."
—
Recessions are not uncommon. We are accustomed to economic cycles, to booms and busts.
But the current meltdown that has caused so much pain across the country and around the world is also engineering a broad transformation of American life. Businesses that shaped their communities for generations — banks, newspapers, others — risk extinction.
GM and Chrysler, once symbols of America's industrial might, filed for bankruptcy. And as part of their get-small strategies, they decided to shrink the number of dealers.
Chrysler released its list first. Hundreds of dealers objected, but a bankruptcy judge approved the automaker's plan to drop 789 U.S. dealerships. (GM eventually expects to shed about 40 percent of its 6,000-dealer network.)
Executives defended their moves as necessary, however painful they might be. Chrysler's president told lawmakers in a recent Senate committee hearing that the poor performance of many dealers costs the company $1.5 billion in lost sales each year. The automaker also said it wanted to bring all three of its brands — Jeep, Chrysler and Dodge — under a single roof.
The Isaksons — who sell only Chryslers and Dodges — say they can understand cuts. But why punish them? Their sales, they say, have been good (about 205 new cars, 150 used in 2008). They point out they've received high marks from customers.
And as far as being a burden, Rob Isakson says that's ridiculous.
"We buy our own cars, every tool ... every part," he says. "What are we doing that's costing Chrysler money? We're doing nothing. All we're doing is creating more market for them. What's wrong with that?"
What has irked the Isaksons even more is the Obama administration's intervention in the auto industry.
"Starting in Washington and going to Detroit, all the way down, I blame everybody for this," says Eric Isakson, Rob's 32-year-old son. "How can someone tell us when we've done everything that we're supposed to do that we can't keep going on? It's a big slap in the face."
The dealers aren't the only ones who will be taking a hit. The National Automobile Dealers Association estimates the GM and Chrysler dealer closings will wipe out more than 100,000 jobs; the average wage is between $45,000 and $55,000 a year.
Then there's the domino effect.
"How many insurance company salespeople are going to be gone?" Rob Isakson asks. "How many tire stores are going to be closed? How many barber shops, how many restaurants? There's going to be a ripple effect."
Add to that taxes and the gaping holes left by dealers — many of them family-owned businesses — who have been mainstays in their communities.
"They're one of the few vestiges of what used to be Main Street America where businesses are locally owned and operated," says John McEleney, chairman of the dealers association. "They're the fabric of the community."
"We're the people the community goes to for support for Little League, for high school athletics, the fund drives for hospitals and colleges," he says. "If GM closes a plant, it's a huge thing. But closing 2,100 dealers is almost like closing 2,100 plants in some of these communities."
Their neighbors find it hard to imagine Hobart without the Isakson dealership. The City Council passed a resolution calling them "anchors of this community," praising their charitable giving and predicting the loss of their franchise — and a second one in town — will "cause irreparable harm."
There are people here who still remember Clarence Isakson, who helped found a savings and loan. Others have served with Bill and Rob served on the Chamber of Commerce and the Rotary.
The family has donated to food pantries, breast cancer fundraising, the YMCA, the Northwest Indiana Symphony. And the Isaksons have been known to come through in the pinch, too, whether it's cash for July 4 fireworks or a last-minute contribution for the town's Oktoberfest.
"If you've got a problem, you go to Rob and say, `I need help,'" says Mike Adams, president of the Hobart Chamber of Commerce. "And Rob helps."
—
The Isaksons have not moved far since they settled here in the late 1800s.
The dealership is just around the corner from the land their Swedish ancestors tilled back then. But just as America traded horses for horseless carriages, the Isaksons, too, embraced the auto.
"When oil is in your blood, it just becomes part of your life," says Rob Isakson.
His grandfather, Clarence, and great-uncle Walt, both Mr. Fix-it types, started their business as the Depression loomed. Times were tough, but dealerships were sprouting up everywhere.
They peaked at about 51,000 in the late 1920s, compared with fewer than 21,000 today, according to the dealership association. (Hobart, a city of almost 28,000, once had Chrysler, Ford, Chevy and American Motors dealers downtown.)
Bill Isakson, now 83, remembers his boyhood sitting along Highway 6, watching a caravan of new Dusenbergs, Pierces and Auburns arrive in Hobart. It was exciting stuff (though it didn't measure up to the day Admiral Richard Byrd, the explorer, breezed through town).
Bill was a Ford man at first. He drove his Model A to high school, then hopped back in after the last bell rang, making a beeline back to the farm to plant corn and beans, milk the cows and clean the barn.
When World War II ended, he joined his dad, Clarence, at what he still calls "the garage." He replaced his Uncle Walt, who moved on to the steel mills.
This gritty stretch of northwest Indiana was once home to many of the nation's steel giants; the mills belched smoke and fire into night sky and furnished jobs that paid enough to put their blue-collar workers behind the wheel of a big, old-fashioned family car made in the USA.
The Isaksons were more than happy to oblige.
Their business was, in a way, a barometer of labor peace. "If there was a (steel) strike, God help us," says Rob Isakson, a husky man with closely cropped hair and a no-nonsense manner. "If it was more than one company, it would really get tight."
Rob, now 52, signed on in the early 1980s, soon after the federal government gave Chrysler about $1.5 billion in loan guarantees to avoid bankruptcy. His father, Bill, was among the dealers who lobbied for help in Washington.
Even with the automaker's near-death experience and other crises — the explosion of foreign imports, recessions, $4-a-gallon gas — the Isaksons never doubted their future.
"We just kept going along, we never struggled. We always did our thing and had customers following," says Bill, who favored green cars — the color of money, he says, and success.
The Isaksons handicap car years, just like a devoted baseball fan would rate a team's seasons. Take 1990 — a good year, with the Plymouth Acclaim and the Chrysler LeBaron. But 1979? A terrible year as Chrysler and other U.S. automakers struggled against the increasingly popular, smaller, fuel-efficient foreign cars.
"They were building some ..." Rob pauses.
His father bluntly finishes the sentence: "junk."
Their memory extends to customers, too. Rob can tell you about the professor who likes to drive convertibles along curvy roads or the Army veteran who bought 20 cars in 27 years — a man, he says, who preferred the open roads to an airplane ever since he returned from World War II.
Almost on cue, James Madison pops up in the showroom to offer a confession and a testimonial.
"The last darn good car Chrysler made," he says, leaning in as if to share a secret, "was when Lee Iacocca was chairman of the board." He smiles.
"But I buy whatever they sell here. I trust these people."
—
When the word spread about the Isaksons, customers came out to protest.
Two members of the business chamber brought a pie and flowers.
"It was like going to see a neighbor who had just lost a family member," says Adams, the chamber president. "There was mourning going on. We tried to say nice things, but we knew there was probably nothing that would change Chrysler's opinion."
And nothing did.
As the showroom emptied, an 80-year-old former customer who drove up from his new home in Tennessee to see family stopped by to get his Chrysler serviced, just as he had for more than 60 years.
By the time the judge ruled that Chrysler could shrink its franchises, Rob Isakson had whittled down his inventory from nearly $4 million to about $750,000.
Just 11 new cars were left.
But his worries are far from over: He still has 22 employees (many who've been with him for decades) and says he's doing everything he can to keep them. And he can't escape that guilty feeling; his blood pressure had shot up 50 points in recent weeks.
"I'm in charge when this is happening so I feel I've been a disappointment," he says. "If you're a coach of a football team ... and your team has a losing record and you don't think you've done anything wrong, you still wonder."
The Isaksons will keep their doors open with a used car business and a service department, and they're already talking about another auto franchise, though they're not in a rush.
But it won't be as Eric Isakson had planned, some day passing on the Chrysler brand to a fifth generation — his young son and daughter.
The family is now waiting for Chrysler to come take down the automaker's sign.
Rob Isakson is torn. He still has a soft spot in his heart for Chryslers. "It's like your first love," he says.
But would be buy another? He hedges. "I'll tell you," he says, "when the time comes."
Copyright 2009 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.
2009-06-13 07:57:13
