An ousted dealer's long road back

Colleen McDonald, 51, fought all the way to the U.S. Supreme Court before getting back Livonia (Mich.) Chrysler-Jeep in August 2015, after losing three dealerships during the 2009 General Motors and Chrysler bankruptcies.

She started in sales at age 17. Her father, the late Walt Norris, owned Century Dodge in Taylor, Mich., and Holiday Chevrolet in Farmington Hills, Mich., in addition to the Livonia store. Her husband, Dave, used to be general manager of the Chrysler-Jeep dealership.

She spoke with Staff Reporter Ursula Zerilli about losing the stores, getting one back and starting over.

Q: Did past recessions prepare you for 2008?

A: Oh, no. With Chrysler we had like 26 days to shut down a 30-year operation.

What was business like before?

We were profitable. We had great CSI. We earned almost every award that you can get with the Chrysler-Jeep and Dodge stores. We ran a really tight ship.

One of my dad’s favorite sayings was, “The seeds of failure are planted in good times.” So we owned everything. My mom owns the buildings. We had zero debts. We watched our overheads immensely. Anytime we had a project, we paid cash for it. We never financed anything. So we could really weather any storm.

When did you hear that some dealers could be shut down?

Right before. Within 30 days.

The Chevy store was a tough location so [I was] not surprised that could be on the list. But these two stores, we were top 50 in the country in sales. Top CSI. I think this dealer was Top 100 in the country. New facilities — we had done the upgrade here, we had remodeled Century.

We didn’t see it coming. It was so out of left field that when our accountant, who was a very large accountant in the area, saw the list of dealers closing, they said, “Oh my gosh, they got the list backwards. These are the ones that are opening, not closing.”

And it wasn’t. It was like the good ol’ boys club. If you had an in with some of these muckety-mucks at Chrysler, it almost appeared, if you had more debt with them, you had a better chance of staying. They didn’t pick the best of the best. They picked their friends.

I’m not saying that I should have remained open and someone else should have closed. Businesses open and close all day long because they can’t handle it or they are bad businesspeople or whatever reason. They want to retire; they want to sell.

People were like, “Oh, they must have been a really crappy dealer.” No, we weren’t. We were a very excellent dealer and that’s what, I think, hurt so bad. You felt like you were part of that rejected class — like you have leprosy.

What did you do?

Luckily, my dad made sure that we are strong people. He almost prepped us for this day. He’d always say things like keep an anti-termination file, keep all of these things. So when we went through arbitration, we had stuff from 1979 of how great we were about this or that. That helped us win our arbitration.

I testified on behalf of 789 dealers in the bankruptcy hearing in New York, which is probably the most terrifying thing I have ever done in my life. I’ll never forget the anxiety. It was horrible. A lot of dealers didn’t want to speak at the time. They were afraid: What could they do to us? My response: They have already done the worst-case scenario. That’s when I became involved with one of the dealers’ rights groups. We went through arbitration and asked to get the arbitration bill passed so we could go to arbitration and try to fight for stores back.

Three key dealers — Alan Spitzer, [Jack] Fitzgerald and Tammy Darvish — started that. But Dave and I were huge in going to Washington, amongst other dealers across the country, fighting for our rights. Knocking on senators’ and congressmen’s doors, having rallies. I was passionate about making sure that I could do whatever I could do to reopen a store, three stores. But this was the one we received back and we’re thankful for that.

Was fighting for your stores like a job?

It was a full-time job. That’s all [Dave and I] did.

We won our arbitration in 2010. Then Chrysler countersued so we had to go through to appellate level. We won. Then they wanted the entire panel to look at it and they said, “No.” Then they decided to appeal it again to the U.S. Supreme Court. The Supreme Court denied their cert [the request to hear the case]. That was finished in July and right then they had to give us a new letter of intent.

How did other dealers respond?

Our associations — the [Detroit Auto Dealers Association, Michigan Automobile Dealers Association and National Automobile Dealers Association] — I don’t think they did much for the dealers who lost their franchises. We had a really good organization and yet when push came to shove, they were really not there for us, which is sad. My dad did such huge things in our state for MADA, for DADA and when it came down to the end degree, they were silent. And not only were they silent, when we went through our final appeal, all the way to the U.S. Supreme Court, they wrote a kind of brief against us reopening.

“It was like the ol’ boys club. If you had an in with some of these muckety-mucks at Chrysler, it almost appeared, if you made more debt with them, you had a better chance of staying. They didn’t pick the best of the best. They picked their friends.”

Colleen McDonald

How did you keep going? 

How do you not? The analogy [my husband] has: Your child was abducted. Your businesses are your baby, OK? You nurture ’em. When they’re sad, you’re sad. When they’re doing great, you’re proud. 

So let’s say you have a child that was abducted and the neighbor had your child. You can tell everybody, “That’s my baby,” but I can’t just take it because they have it now. Our baby was given to other dealers. Our franchise went to, at that time, Crestwood Dodge. Our other store went down the street. So they had our franchise and we were left with an empty building. 

What do you do with an empty car dealership? Nothing. And we had to keep paying our taxes, keep the building up, mow the lawns. I would come out here on weekends and weed. Talk about demoralizing. 

Was the customer base one reason you wanted to come back? 

Sure. We have customers every day that will come in here and say, “Oh my gosh, I’m so glad you’re reopened. We’ve missed you.” 

Our service director came [back]. He’s been with us for 30-plus years and he’s excellent. He’s big on customer service and we’ve always been that way. We’ve always had an excellent customer rapport. Even right now, our reviews are almost five stars and I don’t solicit them. 

We’re not perfect. We, unfortunately, do tick off a few people here and there but we definitely try not to. We do whatever we can to do the right thing. 

How are sales? When will you be able to exhale? 

The sales are where it should be but it’s not where we were. It’s not going to happen overnight. So we’re slowly moving up. I wish that would be going a little bit faster but it takes time. We don’t have any lease portfolios to pull from because we’re starting out fresh. Before, you’d have 100 to 200 customers on any given month that you can work to get them back in their car. We don’t have that. But a lot of our customers who are in leases have contacted us and say, “Hey, my next lease will be from you.” 

Give us three years to get the lease portfolio back up. That’s when I think I’ll exhale. I hope. 

Are you happy your father didn’t see it? 

Yes. He would have killed somebody. He would be in jail right now. 

My dad would say, “Greed is a good thing but you have to have controlled greed.” When we were closed, it was so sad to see how other dealers reacted, instead of reaching out, “What can I do to help?” 

We had over $ 1 million worth of parts that we had to sell within 26 days. Dealers were asking if they could give us 50 cents on the dollar for them. They could buy those parts, sell those parts and if they didn’t sell those parts they were able to return them to Chrysler for 100 percent of the value. 

That’s just not right. 

We were able to get rid of everything. We made a deal with LaFontaine [Automotive Group] to buy our parts at 88 cents on the dollar. And we let them work out of our facility: They were building a parts depot not too far from here and they hired my manager. You know, you don’t want to not let him get a job — he has a family. 

What was the first meeting like when you got your team back together? 

People were excited to get going. 

It was so hard to start over. It still is. To this day, my husband is the first one in the building, the last one to leave. We still clean the building ourselves just to watch costs. It’s a grind. We’re not spring chickens anymore. 

I love being on boards. I was the first president of the Chevy Dealers Association. When we closed I was on the Dodge board. DADA was always near and dear to my heart. I had always hoped to be the first female president of DADA. Not so much anymore.

Let’s block ads! (Why?)

Automotive News Breaking News Feed

Share This:

Leave a Reply