June 11, 2009
You won’t hear me sing, Happy Birthday Mr. President
By Colleen McDonald
In 1999, at age 30, I became president of our family business — Livonia Chrysler Jeep, Century Dodge and Holiday Chevrolet – well known and respected throughout the Metro Detroit community. I was a female entering a “men’s club.” Over the years, our Chrysler dealerships were 5 Star, with outstanding reviews on the manufacturer and dealer levels.
Fall 2008, the housing market crashes and the Financial Crisis takes hold. Banks stop loaning money and sales tumble for all manufacturers. Support, however, for the banking industry, which toppled our economy – is unyielding. The Auto Industry, however, is forced to beg. During this process, Chrysler dealers are virtually forced to purchase more inventory by Chrysler management. We were told, we’re in this together and if we take the inventory the Company will stand by us.
On April 20, 2009, Chrysler files its Chapter 11. Our president states, “I stand with Chrysler’s employees and their families and communities. I stand with Chrysler’s management, its dealers, and its suppliers.” The president explains to us that the only reason why Chrysler had to file bankruptcy was that a limited number of secured lenders refused to comply with the program approved by the major lenders. The president makes it clear that but for these few lenders, the bankruptcy would not have been filed. The following week, those few hold-out secured lenders capitulate and agree to withdraw their objection.
Twenty-four days after the filing, on May 14, 2009, my worst nightmare becomes reality when I learn both of our dealerships are among the 789 dealers to close. Not only terminated, but we are told we will receive no compensation, we must close the business by June 9 and Chrysler will not buy back our inventory. My dealerships are profitable, state of the art, modern and well respected. All of which, along with the lifelong effort of my family, now means nothing. The reality is that I was terminated because I was not “one of the guys.” On May 15, I received another letter informing me that my Chevrolet dealership would be terminated.
I attended the hearing in the Bankruptcy Court last week in New York and testified as to the utter unfairness as to what transpired. Robert Nardelli, Chrysler’s CEO, testified that reduction in dealers was needed due to training, specialty tools and subsidized incentive financing costs. Mr. Nardelli is wrong. The dealers are the ones who pay for the training and specialty tools, and subsidized incentive financing has nothing to do with dealers. I was also shocked to learn that Chrysler and GM, through the bankruptcy process will avoid paying its liability for cars under the lemon laws, as well as personal injury claims. These consumer victims will have no remedy.
I have a question and demand an answer. If, as the president stated on April 20, 2009, the only reason Chrysler filed the bankruptcy was due to those few hold-out lenders and one week into the bankruptcy those “other lenders” capitulated and agreed to the terms … then why did Chrysler have to proceed with the dealer closings under the power of the bankruptcy laws? Once those hold-out banks gave in, the president should have directed the bankruptcy to be dismissed. Chrysler would then have had to negotiate fair and square with the dealerships it wanted to close, and would not have been able to use the bankruptcy laws to shun itself of its legal obligations.
I’m an American. I pay my taxes. My country has used taxpayer money to put me out of business at the whim of Chrysler’s executives with the support of the Treasury. Since when is our government allowed to use taxpayer money to fund private business in such a deplorable manner? What did I do to deserve this fate from my country?
So you can count on two things. I will not sing, “Happy Birthday Mr. President,” and Camelot has not returned.
Colleen McDonald, president of Livonia Jeep Chrysler and Century Dodge with the loyal assistance of her attorneys, David Einstandig and Ken Gross, attorneys with Thav, Gross, Steinway & Bennett, PC, practicing in the Detroit area and co-hosts of The Financial Crisis Talk Center, a radio program that airs weekly at 9 AM on Saturday mornings on WDFN 1130 AM.