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End of road for 4-generation Chrysler dealer
2009-06-13
HOBART, Ind. - At the end of the 81-year marriage, the Isaksons said goodbye by turning off the lights. The partnership was over. Muzi.com News 10090641-1 (muzi.com)The Chrysler sign went dark. Muzi.com News 10090641-2 (muzi.com) 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. Muzi.com News 10090641-3 (muzi.com) Still, when the moment arrived, he did not go gently into the night. Muzi.com News 10090641-4 (muzi.com) "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." Muzi.com News 10090641-5 (muzi.com) 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. Muzi.com News 10090641-6 (muzi.com) 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. Muzi.com News 10090641-7 (muzi.com) 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. Muzi.com News 10090641-8 (muzi.com) Isakson Motor Sales was among the dealers to go. And thus ended a proud family history. Muzi.com News 10090641-9 (muzi.com) 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. Muzi.com News 10090641-10 (muzi.com) 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. Muzi.com News 10090641-11 (muzi.com) 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. Muzi.com News 10090641-12 (muzi.com) "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." Muzi.com News 10090641-13 (muzi.com) "And now," he pauses, "we're surviving but Chrysler says we're not worth keeping." Muzi.com News 10090641-14 (muzi.com) "Am I angry?" he asks, then quickly answers. "You're darn right I am." Muzi.com News 10090641-15 (muzi.com) ___ Muzi.com News 10090641-16 (muzi.com) Recessions are not uncommon. We are accustomed to economic cycles, to booms and busts. Muzi.com News 10090641-17 (muzi.com) 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. Muzi.com News 10090641-18 (muzi.com) 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. Muzi.com News 10090641-19 (muzi.com) 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.) Muzi.com News 10090641-20 (muzi.com) 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. Muzi.com News 10090641-21 (muzi.com) 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. Muzi.com News 10090641-22 (muzi.com) And as far as being a burden, Rob Isakson says that's ridiculous. Muzi.com News 10090641-23 (muzi.com) "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?" Muzi.com News 10090641-24 (muzi.com) What has irked the Isaksons even more is the Obama administration's intervention in the auto industry. Muzi.com News 10090641-25 (muzi.com) "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." Muzi.com News 10090641-26 (muzi.com) 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. Muzi.com News 10090641-27 (muzi.com) Then there's the domino effect. Muzi.com News 10090641-28 (muzi.com) "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." Muzi.com News 10090641-29 (muzi.com) Add to that taxes and the gaping holes left by dealers -- many of them family-owned businesses -- who have been mainstays in their communities. Muzi.com News 10090641-30 (muzi.com) "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." Muzi.com News 10090641-31 (muzi.com) "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." Muzi.com News 10090641-32 (muzi.com) 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." Muzi.com News 10090641-33 (muzi.com) 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. Muzi.com News 10090641-34 (muzi.com) 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. Muzi.com News 10090641-35 (muzi.com) "If you've got a problem, you go to Rob and say, `I need help,'" says Mike Adams, executive director of the Hobart Chamber of Commerce. "And Rob helps." Muzi.com News 10090641-36 (muzi.com) ___ Muzi.com News 10090641-37 (muzi.com) The Isaksons have not moved far since they settled here in the late 1800s. Muzi.com News 10090641-38 (muzi.com) 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. Muzi.com News 10090641-39 (muzi.com)
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