Image: David Dodge
Courtesy of David Dodge
David Dodge in Glen Mills, Pa., opened in 2005 and features more of a 21st century, big-box look, with its flat-screen TVs and freshly brewed Starbucks coffee.
By Eve Tahmincioglu
msnbc.com contributor
updated 5/26/2009 12:26:59 PM ET 2009-05-26T16:26:59

Two very different Chrysler dealerships, separated by just seven miles in southeastern Pennsylvania, are facing two very different fates.

Weathers Dodge in Lima, Pa., is 87 years old and offers a trip back to the 1940s, with its terrazzo floors, wood paneling and employees who seem to know every customer’s name.  Just down the road in Glen Mills is David Dodge, which opened in 2005 and features more of a 21st century, big-box look, with its flat-screen TVs and freshly brewed Starbucks coffee.

One of these two dealerships got bad news and the other good news from Chrysler May 14 when the bankrupt automaker notified nearly a quarter of its 3,200 dealers that they would be dropped from the Chrysler family.

In Lima, Larry Weathers III opened an overnight letter from Chrysler headquarters with his 78-year-old father, Larry Weathers Jr., by his side.

“It is with a sense of profound sadness that we must take this step and reject some of our dealer Sales and Service Agreement(s)," the letter read.

Father and son stood shocked in the dealership that has sustained three generations of Weathers. They knew Chrysler was expected to dump dealerships as part of its restructuring under Chapter 11 bankruptcy protection, but neither expected the company would take away the franchise of one of its oldest dealers.

Image: Weathers Dodge
Courtesy of Weathers Dodge
Lawrence Weathers, Sr., started Weathers Dodge in Lima, Pa., in 1922.
“When I read the letter out loud my father sank below the floor. There were tears,” the younger Weathers recalled. “I was upset. I lost the air in my lungs.”

At the same time David Kelleher, owner of 4-year-old David Dodge, was opening a letter with more favorable news.

We are pleased to inform you...," the letter said. "You can remain our dealer as we move forward with establishing a new company.”

Kelleher, who considers himself a friend of the Weathers family, was happy to read the letter, but he wasn’t surprised. “With all the work we’ve done here, I couldn’t imagine another scenario for us,” he said.

He also was not surprised because at 8 a.m. that morning a regional company official called him to let him know in advance that his dealership and a second location he owns, David Chrysler Jeep at the Philadelphia Auto Mall, would remain part of the Chrysler family.

Courtesy of Weathers Dodge
The most recent incarnation of Weathers Dodge, which has sold an average of 310 new vehicles a year over the past three years, was built in the mid-1940s.
The Weathers got no such advance phone call, or any call at all.

The impersonal letter was how they found out their nearly nine-decades-old partnership with Chrysler was over, and that the future of Weathers Dodge, a fixture of the Lima community for decades, was unclear.

When he was interviewed a few days later, the younger Weathers was still angry about the way the situation was handled, and his father was not available for an interview.

The way the situation was handled still irks the younger Weathers.

“We just got the ax," Weathers said, grabbing onto a photo of his grandfather, Lawrence Weathers, Sr., who started the dealership in 1922. "They didn’t even take our history into consideration. It’s hard for the human brain to find common sense in it.”

Clearly, Chrysler’s decision to shutter 789 dealers across the country was not about sentiment but about trying to save the foundering company, which is operating with $9.3 billion of federal support. At least that’s how the company and auto experts frame it.

“It’s not a reflection on the dealership,” said Kathy Graham, a Chrysler spokeswoman who explained the company's thinking, although she would not comment on any specific dealer situations. The decision to end the franchise relationships was “data driven,” taking into consideration everything from customer satisfaction to the number of brands under one roof.

Chrysler has not provided any specific details about how executives made the final decisions. But the treatment of the Weathers, a longtime Chrysler dealership family that consistently exceeded the company’s minimum sales requirements and had 35 “Five Star” service awards, offers a glimpse of where auto retailing wants to go.

It’s about the future, not the past. And dealerships like Weathers will increasingly be the ones left out in the cold, while upstarts like David Dodge are rewarded.

Weathers Dodge, which has sold an average of 310 new vehicles a year over the past three years, was built in the mid-1940s. Aside from upgrades such as a new roof and boiler, it looks very much the way it did back then. The building, at about 12,000 square feet, has eight service repair bays and a cozy and nostalgic feel.

Despite being encouraged by Chrysler brass in the past to make more changes, Weathers had yet to make any major renovations. “We always focused on the customers, the good old-fashioned way," he said.

By contrast, David Dodge, which has been selling an average of 984 new vehicles a year, includes  20,000 square feet with 15 repair bays and a large vehicle lot. With the flat-screen televisions, including one in a separate kids’ playroom, "it’s all about the customer experience,” Kelleher said.

Kelleher's road to becoming an auto dealer was a far different one than the one traveled by  Weathers.

For Weathers it seemed predestined. At age 11, with both his father and grandfather in the business, he began working in the dealership’s detail shop during the summers and part time.

After graduating college in the late 1970s and serving as an officer in the Navy, he went to work at the family business full time in 1982. He now co-owns the business with his father.

Kelleher, whose father was a bailiff and mother a schoolteacher, says he got into the business by accident. Originally from Boston, he came the Pennsylvania for college, where he studied political science with plans to become a lawyer and then go into politics.

After college, he ended up working at a dealer to make extra money.

"I saw an ad that read 'make $50,000 first year' (and) answered it knowing it was a lead-on," he said. "The first year I made $82,000. I moved to management shortly thereafter."

Kelleher bought into a partnership at a Havertown, Pa., dealership in 1998, and in 2005 he bought his own Dodge dealership and immediately upgraded it with a new facade.

Experts say that Chrysler dealerships need to be larger today to house the company's three major brands — Chrysler, Dodge and Jeep — a goal the company has been pursuing for the past five years with its Project Genesis.

Weathers says his dealership could have handled the three brands with slight renovations, but he maintains Chrysler told him that they “couldn't give us the other franchises since we were too close to others or they were not available.”

Both Weathers and Kelleher have been keeping costs down and holding their own despite taking some hits to the bottom line.

Sales at Weathers are off 24 percent, compared with an average Chrysler dealer's decline of 35 percent, says Weathers. Despite the decline, the dealership has not laid off any of its 29 employees.

Kelleher says his staff has shrunk to 38 from 125 last year, mainly through attrition, as  monthly profit increases have fallen to 0.8 percent, from about 4 percent during good times.

Chrysler spokeswoman Graham says profits were not an “overwhelming factor” in the company's decision, but some industry watchers believe the smaller volume of a dealership like Weathers' must have been a factor.

“When they looked at dealers they looked at size and sales, the ones selling lots of cars,” said Mike Boudreau, a turnaround expert with O'Keefe & Associates in Bloomfield Hills, Mich.

Others say that approach would be shortsighted.

“It costs them very little to keep this guy,” said George Hoffer, professor of economics at Virginia Commonwealth University, referring to Weathers Dodge.

“My guess is whatever sales this guy has were based on personal and traditional relationships. Their sales are incremental and made through those personal contacts,” he said. “Once that’s gone there will be no allegiance to any Chrysler product.”

Indeed, customer loyalty has kept Weathers Dodge in business. After local television stations descended on his dealership last week to interview Weathers about the loss, he was flooded with e-mails and phone calls from customers, community leaders and even other area dealerships.

Even Kelleher was upset by the decision to eliminate Weathers Dodge, where he once sent  family members to buy vehicles.

“I consider Larry and his dad to be my friends,” he said. “I could not disagree more with the Weathers decision, it’s sickening. But they have a knife right now and they’re cutting.”

While some Chrysler dealers plan on fighting Chrysler's effort to eliminate them, Weathers has no intention of joining them.

Losing the Chrysler franchise as of June 9 means he will not be able to sell new Chrysler vehicles or do any warranty work on the company’s cars. It will be a heavy blow to his business, but he plans to focus on selling used vehicles and offering service, and looking for another auto company, possible a foreign maker, to work with.

It’s unclear if Weathers will be able to ride out the storm, and he’s not sure what that will mean for his family, his staff, or for the many community groups he’s donated to and volunteered with over the years.

Ironically, a week before the rejection letter arrived, Weathers Dodge was named 2009 Family Business of the Year by the Delaware County Chamber of Commerce.

“Companies like Weathers represent the county, sponsoring local little league teams, employing people here for decades,” says Jeff Vermeulen, president of the chamber. “If they leave the area it would just be a tragedy.”

Weathers, who has four children with the oldest in 12th grade, is confident he’ll come back bigger and better.

“I have to turn the page and move on,” Weathers says, choking up and brushing away a tear.  “It’s all about how you deal with things in life. Every second you put toward that negativity is a second you don’t see an opportunity.”

In an e-mail, he added: "It is not about fancy buildings and expensive front doors.  Maybe that is why many dealers and Chrysler are in trouble. What is lost in the world today is the basics that the country was built on.  Principles, morals, hard work, honesty and integrity. We have been a sturdy, hard working, dependable, superior performing dealer. Did you ever hear the story of the tortoise and the hare?  The hare never wins."

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