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COLUMN ONE

'Vulture' shoppers circle Chrysler dealers

As many prepare to be dropped by Chrysler, salesmen run up against sky-high customer expectations. Half price? Dream on.

May 30, 2009|Ken Bensinger

In the shadow of a big blue inflated gorilla perched on the roof, bright yellow signs shouted "Ultimate Liquidation Event." Deep price cuts, painted in bold neon letters, adorned the windshield of nearly every car on the Garden Grove dealership lot.

Janice and Yao Huang arrived on a hot afternoon looking for a bargain.

"We're here for the sale," Yao told Danny Covin as he approached, squinting in the sun. "We heard you are closing down. Do you have things on sale?"

A grimace flickered across the salesman's face. But then Covin smiled, nodded and slowly turned to show them the Jeeps he had in stock, many with prices $4,000 or more below sticker.

The young Irvine couple had been thinking about buying a new Jeep for some time. They said they didn't seriously consider doing so until they heard about the woes of Chrysler, Jeep's parent company, at which point they searched online for the nearest dealership.

That brought them here to the Union Chrysler Jeep Dodge on Trask Avenue. It's one of 789 dealerships nationwide whose franchise agreements with Chrysler will be severed June 9. The bankrupt automaker says that aggressively shrinking its network of 3,200 dealers is a painful but necessary step as it tries to return to viability.

Dealers slated for closure will have to unload, at a loss, the vehicles and parts they can't sell before that date.

Like other ill-fated dealers, Charles Lee, owner of the Union Chrysler Jeep Dodge, received notice in an express mail letter May 14. "We wish there were a better way, but there isn't," it read.

Because Chrysler is using the bankruptcy to break the contracts, it was obliged to publish a list of all the dealers it's targeting. That created a frenzy among buyers.

Salesmen like Covin, already struggling through the worst sales downturn in three decades, view the situation as a mixed blessing. Long-anemic showroom traffic is finally up, but everyone seems to expect fire-sale prices.

Customers have demanded:

"We want liquidation prices!"

"We want a deal!"

"We'll pay half price!"

In the end, the Huangs didn't buy, but they said they were pleased with the pricing and might come back to make a purchase.

"You can't blame folks for wanting a good deal," said Covin, trudging back to the spot on the lot where he prefers to stand, scanning the street for more customers.

Covin, a Vietnam vet and grandfather of four, started his sales career at Montgomery Ward in Lakewood, selling sporting goods before moving up to televisions and stereos -- a job, he said, that paid for his first house. He began selling cars in 1978: Hondas in Long Beach, then Toyotas and Nissans just down the street from the Union dealership.

Like the other salesmen here, Covin spends five or six days a week walking the block-long lot. His skin is tanned a golden brown from long hours standing outside. He sports a salt-and-pepper goatee. He wears a suit and tie on weekdays and a billowy Hawaiian shirt on weekends, revealing a big watch and a heavy gold bracelet on his wrists.

Covin lifts his sturdy shoulders into a good-natured shrug when yet another customer demands an outlandish price.

"People throw it in your face," Covin said as he went to greet a family arriving in a hulking pickup. "They say, 'You guys are going out of business.' I say that the best deal you're ever going to get is right now."

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A few decades ago, Frank Lee, an immigrant from Korea, saved up enough money working as a mechanic to buy a dry cleaning business. He parlayed that into a used car lot. In 1995, he bought the Union Dodge new-car lot on Trask Avenue, sandwiched between Garden Grove's bustling Korean District and Little Saigon.

His son Charles, a reserved and dignified man, took over the business in 2005 after his father retired. A year and a half ago, he bought out another franchise to bring the Chrysler and Jeep brands onto the lot, fulfilling the wishes of Chrysler brass that wanted to do away with single-brand locations.

As one of the few three-in-one stores in Orange County, Charles Lee said, he assumed he'd be safe from any cuts.

"The letter was a surprise," said Lee, who declined to discuss the dealership's finances. "I don't have any definite plans now about what I'm going to do."

Nor do his employees. Arty Khan has worked here for eight years, and his official title has him overseeing used car sales. But since the general manager quit a few months back and wasn't replaced, Khan and new-car manager Jeff Locastro have been running the show.

On June 9, affected dealerships must take down their Dodge, Jeep and Chrysler signs and cease advertising with the automaker's trademarks. They will no longer be allowed to sell new Chrysler vehicles to consumers or provide warranty service.

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