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Automaker’s bankruptcy stuns city Suzuki dealership

CHARLESTON, W.Va. -- The manager of Charleston Suzuki said he and his staff are devastated by American Suzuki Motor Corp.'s surprise announcement that it will cease selling automobiles in the United States.

American Suzuki Motor made the announcement and filed for Chapter 11 bankruptcy protection on Monday.

Ruth Lemmon, president of the West Virginia Automobile and Truck Dealers Association, said six dealerships sell Suzuki automobiles in West Virginia: Charleston Suzuki of St. Albans, Thornhill Suzuki of Chapmanville, Lewis Suzuki of Beckley, Pantili Suzuki of Princeton, Matheny Motors of Parkersburg and John Howard Motors of Morgantown.

Of the six, only Charleston Suzuki and Pantili Suzuki are total stand-alone dealerships, Lemmon said.

As stand-alones, they don't sell any other brands.

Charleston Suzuki General Manager Steve Huffman said he learned of Suzuki's decision about 9:30 p.m. Monday.

"There was no warning, no heads up," he said. "Nobody had a clue."

The dealership has 71 new cars on its MacCorkle Avenue lot.

"Right now we're just selling cars and doing business as usual," he said. "Suzuki is telling us they're going to do something to make the cars that are here disappear.

"What happened with Chrysler (in 2009) was, there was an existing dealer body left after they closed some dealerships and cars that were left would go to other dealers. That's not the case here. The way I understand it is, the way they (Suzuki) are doing Chapter 11, what's left, we'll be responsible for.

"They're supposed to come out with some kind of exit strategy for dealers by the end of the week," Huffman said.

He has heard that Suzuki may reward dealers who help clear other dealers' inventories by taking additional vehicles. "That's scary because if you don't sell them, you're going to be stuck with them."

Also, "Suzuki has basically stated that they will ask certain dealers to stay as parts and service dealers only," Huffman said. "If you do that, you can do their warranty work."

Huffman said the reaction to Suzuki's announcement has ranged from the customer who called Thursday blaming the dealership for the situation, to the customer who demanded he take back a car the dealership recently sold, to the potential customer who called to see if the dealership is conducting a 50-percent-off sale.

"The sharks are in the water," he said.

Charleston Suzuki was established a few years ago, shortly after the financial crisis that threw both Chrysler and General Motors into bankruptcy. Charles Rashid's Chrysler-Jeep-Dodge-Suzuki dealerships in Logan were wiped out with one exception - the Suzuki dealership.

Rashid tried to make a go of it with just the Suzuki dealership but it didn't work. Wally Thornhill picked up the franchise and added it to his portfolio of auto brands in Chapmanville.

Eventually Rashid picked up another Suzuki franchise - the one now known as Charleston Suzuki. Huffman was one of 12 people who went to work for Rashid at the new store.

"We've grown by leaps and bounds," Huffman said Thursday. "We were in the top 15 dealers in the nation. We plan on staying in business as a pre-owned automobile dealer and still providing parts and service to our customers.

"It's disheartening, really," he said of American Suzuki Motor's decision. "A lot of dealers just spent major money. Wally Thornhill just built a whole new facility. Beckley did, too."

Thornhill did not immediately return a phone call seeking comment. Sarah Abrams of Lewis Automotive told the Beckley Register-Herald earlier this week that it is business as usual there and the Suzuki decision will have no effect on the Nissan portion of Lewis Automotive's business.

American Suzuki Motor has said it has enough cash to operate during the restructuring and that it "intends to honor any automobile buyback agreements that are currently in place with financial institutions."

The company said that once it exits bankruptcy protection, it will focus on selling Suzuki motorcycles, all-terrain vehicles and marine outboard engines.

The company said it is exiting the car business because of slow sales, unfavorable foreign exchange rates and high costs because of U.S. regulatory requirements.

Lemmon said, "This has been almost a regurgitation of what we went through in 2008-2009 with the GM and Chrysler dealers.

"The idea that these business people have made sizeable investments in these dealerships and they are going to be just washed away with no regard to the personal cost and to the devastation to their employees is unthinkable," Lemmon said. "What's even worse, no one knew anything about this."

Lemmon said a Suzuki dealer called her about 8 a.m. Tuesday but didn't mention the company's announcement. "I said, 'Aren't you calling me about the Suzuki deal?' He said, 'What are you talking about?' The dealers didn't even know!

"To become a franchised auto dealer is no small feat," Lemmon said. "It takes money and a lot of investments - facilities, employees, inventories. To just out of the clear-blue sky file bankruptcy and say you'll concentrate on marine outboard engines and all-terrain vehicles! I find this so offensive, that a company can treat people like that."

Contact writer George Hohmann at business@dailymail.com or 304-348-4836.

 

 


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