In a filing in U.S. Bankruptcy court in New York, Chrysler this week has proposed to eliminate 789 dealerships by June 9, and the Auto Mart, 91 years old, was one of those named. The filing stated that the criteria for eliminating dealerships were low sales, noting that 90 percent of Chrysler's sales come from 50 percent of its dealerships.
Harlan Auto Mart, a Chrysler, Dodge, Plymouth Jeep dealership, is one of 22 dealers in Iowa that will lose their franchises.
Auto Mart Owner Mike Byrnes said the news is a blow to any smalltown dealership, including the Harlan Auto Mart, but doesn't spell disaster for the local business. The business will continue to exist without the Chrysler, Jeep and Dodge franchises, he said. It is not going out of business, he said.
"When Chrysler LLC filed for bankruptcy on May 1, we knew our franchise would undergo drastic changes, but we did not envision it going away," said Byrnes. "Trust me folks, this is not a happy situation for us, but we want to do our level best to navigate through this mine field with our customers' and employees' best interests at the forefront."
Byrnes said this is not the worst thing that has ever happened. Any franchise holder has rough spots in working with a chain.
"Will we pick up another franchise?," Brynes said, "who knows, but it is certainly not out of the question. Harlan Auto Mart, under various names and owners, has been around for nearly 100 years. We still have the same dealer plate number (D-174) that was assigned to this business in 1914. The most important things we can do are to keep a positive attitude, an open mind and to place our trust in God."
In addition, Byrnes said Harlan Auto Mart is not in financial trouble. While the media has painted such a bleak outlook for the industry as a whole, the Auto Mart's profits were growing.
"We accomplished this on two fronts -- by squeezing every bit of undo expense out of our operations, and by simply taking advantage of the opportunities that arose, especially with late model, low mileage used vehicles that we bought directly from Chrysler," Byrnes said.
With the announcement of the franchise elimination, the company has promised a "soft landing" for the rejected dealers, but the bankruptcy proceedings essentially will dictate the Auto Mart's fate in respect to new vehicle inventories, Mopar parts inventories and special tools.
"We have joined a group of affected dealers who are being collectively represented via the National Automobile Dealers Association (NADA)," Byrnes said.
As a Chrysler franchise holder, in the short-term it will be business as usual until the rejection takes place June 9. For local customers, Harlan Auto Mart will be able to honor warranty claims only for a very brief period of time.
In the long-term, following June 9, all warranty claims will be honored, but only at an authorized Chrysler franchised location.
"At this time, it appears that the closest dealers whose agreements will be perpetuated will be Coleman Motors in Denison and Deter Motor Company in Atlantic," said Byrnes. "For all other maintenance, parts/repairs and sales of used vehicles, we will continue to offer the same great service we have always provided our trade area."
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The original dealership was founded by Fred D. Hansen in 1918 when he was discharged from the service after WWI. It was called "Hansen Garage" and sold Maxwell cars, which were the forerunners of Plymouth. The original location was nicknamed "Gasoline Alley"; a big two-story barn in the alley behind what is now the area of the former Radio Shack store near the corner of 7th and Durant. The original franchise was for the "Star" car made by Durant Motors. The first new vehicle was a truck sold to Rae Walters for use at the rendering plant. It is believed that the first new car customer was Walter Bell, a mail carrier.
The dealership moved to a barn east of the Harlan Newspapers and then to a building at 1006 5th Street. The Chrysler franchise was added in approximately 1926. In 1930, Hansen built a new building at the corner of 8th and Market at the site of an orchard. This structure today is commonly known as the "Petsche Plumbing" building which now contains Courthouse office space. Used cars were kept one block north at the site of Smith Livery Barn. In 1939, a new car showroom was built east of the garage.
The name was changed to "Harlan Garage" when the business was sold to Vandenburg and Vichecker in 1945. In 1947, Gale Vandenburg bought his partner out and the name was changed to "Vandenburg Motors". The name "Harlan Auto Mart, Inc" originated when the business incorporated in 1963 and was owned by Vandenburg, Peters and Breach. The location was moved to 12th and Chatburn. In 1972, the business was sold to A.L. Krogstad, and moved to the corner of Hwy 44 & 59 in 1977. Pat Byrnes purchased the corporation in 1979, and he continued to operate it until 1999, when his son, Mike Byrnes, purchased the corporation.
