15 Chrysler dealerships in Washington state to lose franchise; King County spared

King County auto dealers dodged a bloodbath Thursday, when Chrysler announced plans to stop doing business with 800 of its 3,200 dealerships next month, but that doesn't mean they are healthy.

Wracked by declining sales, some local dealerships already have closed or been sold, and more are expected to fall. General Motors dealers could hear as early as today whether they are among more than 2,600 stores whose franchises will not be renewed by the financially strapped carmaker.

"We're all just kind of waiting," said Dan Johnson, who has owned Jet Chevrolet in Federal Way with his brother and mother for 33 years. He hopes the business's long standing and its location along Interstate 5 will keep it off GM's closure list, despite a precipitous drop in sales.

"This is the hardest we've worked in 33 years, and just to break even is a thrill," he said.

Sales of new and used cars totaled $1.6 billion statewide during the last three months of 2008, down 31 percent from the same period in 2007, according to the state Department of Revenue.

BBC Dodge in Burien went out of business last year after 50 years in business, and Jack Carroll sold his Lynnwood Dodge franchise to Town & Country Chrysler Jeep of North Seattle after that dealership rebuffed his efforts to acquire it.

This week, Rainier Automotive Group sold its Eastside Hyundai and Eastside Subaru dealerships. Its two remaining dealerships — Auburn Nissan and Burien Nissan — are for sale, said Mark Johnson, president of M.D. Johnson Inc.in Enumclaw, which advises dealers on mergers and acquisitions.

"When all the dust settles, this is not going to make these car companies any more money," Johnson said of the automakers' hopes of driving sales by having more brands under each dealer's roof. "You don't sell more cars because you have fewer dealerships."

Even the survivors are struggling.

Jim Walen, who owns Ford of Kirkland and bought Eastside Hyundai for a couple million dollars Thursday, saw sales fall 20 percent last year.

"This is just the tip of the iceberg as far as the consolidations," said Walen. "I think we're at the bottom of the market, but I don't think it's going to just rebound all of a sudden. We're going to have a slow recovery."

For Robert Larson, Chrysler's closure list is "bittersweet."

Next month, his Larson Chrysler Dodge facility in Puyallup will become the only Chrysler dealer in Pierce County. But one of the three dealerships losing Chrysler franchises there is his Larson Chrysler Jeep in Tacoma.

Altogether, 15 dealerships in Washington are on Chrysler's closure list. Some will stay open because they have franchises with other carmakers.

Larson plans to keep servicing Chrysler vehicles in Tacoma and will send new cars there from Puyallup for potential buyers to drive.

But the first dealership he owned without his father will no longer be a Chrysler franchise. "That's the bitter part of it," he said.

Larson also dislikes seeing Pierce County dealerships Tacoma Dodge and Milam Jeep on Chrysler's list, which must be approved by a bankruptcy court judge.

Larson also owns Toyota, Nissan, Volkswagen, Porsche, Audi and Mercedes dealerships and says his business is profitable.

"Our new-car sales are off like everybody else," he said, but Larson can afford a couple of remodels and a new building in Fife for his Mercedes store.

Still, he is not sure how closing dealerships will help Chrysler: "That's the $64,000 question, and that I can't answer."

Larson does not have his eye on the two Nissan dealerships that Rainier Automotive wants to sell after losing its inventory financing — and therefore its inventory — last month.

"It's going to be tough for whoever does it, because of the capitalization," Larson said. "It's a tough market for somebody to get going."

Melissa Allison: 206-464-3312 or mallison@seattletimes.com