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Economy and Business

The auto bailout plays out at Ohio dealerships four years later

Scores of Ohio car dealers lost their franchises in 2009, but those who held on are doing well

Tim Rudell
John Furey of Furey Chrysler, Dodge, Jeep in Malvern--in Carroll County just south of the border with Stark County
Courtesy of Tim Rudell
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In The Region:

America’s Big Three car makers are back, which is good news for northeast Ohio manufacturing.  But, we wondered how the local end of the business, the dealerships of the region, are faring four years after the massive government-led restructuring of the auto industry. WKSU's Tim Rudell talks to one of those dealers in a small town in Northeast Ohio.

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It was early 2009. John Furey opened an overnight deliver envelope from Chrysler Corporation.  He's a Chrysler dealer in the Carroll County village of Malvern, and he was about to learn the fate of his business. The letter said "Congratulates" and went on to confirm that he would be continuing as a Chrysler dealer.

Furey recalls the cutting of 789 Chrysler franchises that day. They were part of forced bankruptcy of the car maker in the federal government auto industry bailout plan.

“There are, I guess, different buckets that dealers fell into. We who survived and managed to move on; those who had multiple dealerships and so had other opportunities and were able to move on; and then we have the ones that were solely invested in Chrysler. ... They lost their homes and everything, And they’re the ones I feel worst about.”

Was it necessary?
In 2009 Furey said the dealer purging was unfair and unnecessary, and he still calls the cuts “business executions.”  But he acknowledges he and other dealers who weren't cut did benefited.

“We’re four years past that fateful day, and of the dealers who weren't executed, I don’t know of any that aren't doing extremely well. There are a couple of reasons for that. No. 1, if somebody will eliminate a large percentage of your competition, you have a better opportunity there. The other thing is the pent-up demand. It is enormous. The average car on the road today is still 11 years old.”

Upgrades left to the locals
Business is improving so much, in fact, that some auto manufacturers have pressed dealers across the country to invest in upgrades to their stores -- in extreme cases requiring seven-figure renovations.

“Dealers are up pretty in arms about that, even trying to get legislation against it. But Chrysler reversed its thinking on that some months ago and basically said, 'If your dealership is OK with your customers, it’s OK with us.' Maybe in downtown Chicago, a $6 million facility is necessary; maybe in rural Ohio, what you've got is just fine. And Ford has kind of taken that same approach also, and I think that’s a great approach.”

Furey says business for him and just about all car dealers in eastern Ohio is also looking up for because of something that has little to do with auto manufacturers. The Utica Shale boom is funneling massive amounts of new money into the regional economy
(Click image for larger view.)

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