Darner fighting Chrysler's closure filing - East Valley Tribune: News

Darner fighting Chrysler's closure filing

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Posted: Tuesday, May 26, 2009 4:56 pm | Updated: 1:26 am, Sat Oct 8, 2011.

The owner of Darner Motor Sales in Mesa is launching an effort to try to overturn the decision by bankrupt Chrysler Corp. to terminate his new-vehicle franchise.

Joel Darner II is appealing to friends and supporters to write members of Congress, Obama Cabinet officials and the Automotive Task Force overseeing the reorganization of the U.S. auto industry for help in keeping the franchise.

Darner dealership on Chrysler closure list

"The expediency by which the government wants this bankruptcy handled is unprecedented, and they don't want us to be heard but to just sacrifice everything we have worked for, for 'the greater good,'" Darner wrote in an e-mail to supporters Tuesday. "They are forcing us to close without any compensation or the ability to sell our businesses ..."

As part of it's Chapter 11 reorganization, Chrysler is asking the bankruptcy court to approve the closing of about one-fourth of its dealerships on June 9. The 70-year-old Darner business, 837 W. Main St., is one of four in Arizona the automaker wants to terminate, saying it is not selling enough vehicles.

More than 300 of the 789 dealerships targeted for closing, including Darner, have organized a Committee of Chrysler Affected Dealers to oppose the mass shutdown. In addition to the letter-writing campaign, the committee has filed objections with the bankruptcy judge, and Darner also filed an objection Tuesday as an individual dealer.

The bankruptcy judge has scheduled a hearing on June 3 to hear Chrysler Corp.'s request to terminate the franchises.

"The notion that the dealers are underperforming is wrong," Darner said. "Through the end of March, we were at 133 percent of our minimum sales responsibility. The national average for Chrysler dealers is 117 percent."

Still, Darner is hedging his bets, trying to reduce his new-car inventory as much as possible by June 9 in case the decision can't be reversed, or at least delayed.

"We have been aggressively pricing, and we've sold about 25 percent of our inventory in the last 10 days," he said.

Getting most of the inventory sold by June 9 is important for Darner because on that day, the dealership may lose factory rebates, which will make it difficult for Darner to compete on price with surviving Chrysler dealers that still have rebates available.

Darner also would have to designate any leftover new cars as used, which could have an impact on warranties, he said.

Chrysler Corp. has indicated that it will not buy back any of the unsold inventory.

Another worry for Darner is his supply of parts. If he loses the Chrysler franchise, he said it will be more difficult to sell his parts inventory to remaining Chrysler dealers, who currently are among his best customers.

Darner said his company will stay in business after June 9, but only selling used cars and servicing all brands. Darner said he has purchased additional diagnostic equipment and software to help his technicians repair other makes.

Several customers interviewed by the Tribune on Tuesday expressed sorrow about the dealership's likely fate.

"I think it's tragic," said Dan Carroll, a Phoenix resident. "This dealership has been part of the community for so many years. It's disappointing to see folks who have worked so hard to build a good reputation fall victim to the economy."

Dave Rice, a resident of Fountain Hills who worked for years in the auto industry in Detroit, called Darner's situation "a sad day in history. ... I feel bad for these folks. They have been here forever. I know other people who have bought from them and never had a complaint. But it's all part of what's happening today."

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