Embattled Chrysler dealers feel relief

May 18, 2009 9:36:43 AM PDT
Chrysler is now in bankruptcy and while the court figures out what happens next for the automaker, dealerships are actually breathing a sigh of relief. [INTERACTIVE: Click here to take a look at Detroit's Big Three]

Chrysler warranties are still being honored and cars are still being sold. Although the economy has clearly hurt the carmaker, local dealerships say bankruptcy may not be a bad thing.

What Chrysler needs right now is more customers like Beth Scranton of Houston.

"We have a van, we've got a couple of jeep products and a couple of Dodge products," she told us. "They have all been great cars for us, we like them and will continue to buy them."

Scranton says her brand loyalty will not end now that the company is in bankruptcy.

"Obviously I am not happy to see them in bankruptcy, but obviously auto sales have been down and it has driven dealers into some rough times," Scranton said.

In fact dealers say times are tough. At River Oaks Chrysler Jeep, owner Alan Helfman says his car lot will survive, but when one dealership closes, it has a huge impact.

"If a dealership closes you can have up to 100, 150, 200 employees and their families affected, if the manufacturer closes its millions, I mean millions of American workers," said Helfman.

As Chrysler enters bankruptcy, Helfman says his dealership will weather the storm because the property is paid for and the dealership is relatively debt free. Helfman says the coming partnership with Fiat will bring more choices to consumers and hopefully more customers into the showroom.

"With Fiat, if we have a gas crisis again we will be there," Helfman said. "They are giving us the technology, we will build joint cars, and we'll have Fiats and maybe Alfas or Maseratis."

When the company emerges from bankruptcy, President Obama says Chrysler's financing division is being taken over by GMAC. That will give consumers access to more available credit and it could help to sell more cars.

"It will be helpful to the consumer because we will get more cars out there," Helfman told us.

Chrysler hopes to stay in bankruptcy for 30 to 60 days. The car company is closing plants temporarily, and it could be a couple of years before the first Chrysler/Fiat car is on showroom floors.

When car makers fall on hard times and certainly now that Chrysler is in bankruptcy, customers want to know about warranty work. They are still being backed by the company and they will be backed by the federal government if Chrysler cannot emerge from bankruptcy.

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