Local car dealers caught in Chrysler crunch

Local car dealers caught in Chrysler crunch

What was the “Land of Dreams” for a young escapee from the Nazis has turned into a place of harsh economic realities for his sons, who own Chrysler-Jeep dealerships in Tenafly and Wyckoff.

Rob and Rick Engel got the news suddenly in a terse phone call at 9:15 on Thursday, May 14, followed by a letter delivered by FedEx at 9:30 – Chrysler was dropping them as dealers.

“We thought there might be a problem in Wyckoff, but we never dreamed we would have a problem in Tenafly,” said Rob Engel, during an interview in his office at Tenafly Chrysler Jeep Inc., where he said the dealership tops the list of customer retention in the Northeast.

“We exceed requirements in service, sales and parts,” said Engel. “I demanded to know their reasons, but they refused to meet with me,” he said of Chrysler representatives.

Rick and Robert Engel stand in front of their Tenafly dealership. Charles Zusman

Engel said they would keep the businesses open, as service and tire centers and selling used cars, and plan to keep their some 60 employees.

“For now we are going back to our roots, which is servicing cars,” he said.

He also hopes a legal challenge by a coalition of affected dealers will succeed and hopes to be reinstated as a Chrysler dealer. The Committee of Affected Chrysler dealers has a court hearing scheduled June 3.

The bankruptcy of Chrysler and possibly General Motors is just a headline story to many, but it is an intensely personal one to Engel. He said that his home is collateral on the business property.

He noted he made a substantial investment in the Tenafly property, which he would not have done if he had known his dealer status was in jeopardy. Also, dealers like him will be left with an inventory of cars and parts that Chrysler won’t buy back.

Asked what he will do, he threw up his hands. “Sell them at a huge loss,” he said.

Pending a final bankruptcy hearing in New York, Chrysler plans to shut 789 dealerships in the country, leaving 2,400 still open. New Jersey is home to 31 of the affected dealerships.

The Engels’ story is one of Jewish survival in the old world and hard work and success in the new.

Their father, Peter, escaped the Nazis in his native Austria, walking across France, and ultimately joined a Czech unit serving with the British Army. He worked as a Jeep and tank mechanic and it was in England that he met his wife Elizabeth. She was able to leave her native Germany and later worked as a welder at a factory making Spitfire fighter aircraft.

In 1960 the senior Engel opened Tenafly Auto Service, a repair shop, and his sons worked there even before they were teenagers. A representative of Peugeot, the French car manufacturer, recruited Peter Engel to be a dealer for the company in 1968.

He died in 1977, never getting to see his sons expand the business. In 1987 they opened an AMC Renault Jeep dealership in Teaneck, and in 1988 the Chrysler dealership in Wyckoff. The Teaneck dealership moved to Tenafly in 1993.

The Engel brothers know the car business from the shop floor up. From their young years working with their father, they know what it is to don mechanics overalls and pick up a wrench. Rob was 11 and Rick 13 when they started.

The auto business has truly been a family affair for the Engels. Their grandmother, Charlotte, ran the business office until she retired at 96. Rob Engel’s two sons, Peter 25, and Michael, 23, would have made the fourth generation of Engels in the auto business.

Does he want them in the business? “With all the difficulties, no,” he said.

Chrysler, in published statements, said it has too many dealerships, forcing them to compete with one another, and that sales at the targeted dealerships are too low.

Rob Engel, though, has another take on the situation. The bankruptcy law allows Chrysler to get around state franchise protection laws, and Engel suggests the company is shutting local dealers in favor of larger highway operations.

He also said Chrysler is trying to force the three brands – Chrysler, Jeep, and Dodge – under single dealer roofs.

“They could have made us all Chrysler, Jeep, Dodge dealers and let the market decide,” he said.

Engel sees alternatives to the hard-nosed Chrysler plan. Why not give the TARP money, the federal aid package, to dealers and give them 12 months to sell off their car inventory? And perhaps the canceled dealerships could survive as service and parts points.

Engel was referring to the government Troubled Asset Relief program, which loaned $1.5 billion to Chrysler Financial to make car loans and thus shore up sales.

Dealerships going under will cause a spike in unemployment, putting further stress on government agencies, Engel said. He offers some math to back up his point.

The average dealers has, say, 50 employees. Multiply that by the number of dealerships threatened and you get some 40,000 jobs. Then, Engel said, each dealer may rely on another 200 supplying other goods and services and you get roughly 160,000.

The total, then, is some 200,000 jobs. Add another 300,000 if GM goes under.

“That’s half-a-million jobs in three months,” Engel said.

Besides the economics, Engel said, Chrysler should be more fair to the dealers, and show compassion for dealers and employees who may lose their livelihoods.

“I am very concerned that Judge Gonzalez is rushing the case through, and dealers will not have enough time to establish their case,” Engel said, referring to Judge Arthur J. Gonzalez, who is hearing the bankruptcy case in New York.

He also said he fears that the task force helping Chrysler steer through the crisis does not have knowledge of the auto industry and is taking its cues from Chrysler executives.

On the day of the interview, Reisha and Bernard Redmond of Franklin Lakes were in the dealership, shopping for a new car. They have been customers for 10 years, and said they go out of their way, passing a number of dealerships along the way, to shop at the Tenafly dealership.

“At other dealers you are just a number,” said Bernard Redmond. “Here it’s about personal care.”

Engel continues to harbor hope and says the public can help. “The more people who raise their voices and contact their legislators, the better chance we have of getting reinstated,” he said.

“This shouldn’t happen in America,” he said.

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