5 Turlock auto dealerships calling it quits

TURLOCK -- Five car dealerships in the Turlock Auto Plaza will close, sell the last of their inventory and lay off 42 employees during the next three weeks.

Turlock Chrysler, Turlock Dodge, Turlock Jeep, Turlock Subaru and the Turlock Auto Plaza Pre-Owned Center will close for good, becoming the recession's latest victims.

"We've had everything go against us this year, and it's just too much," said Bob Field, who co-owns the dealerships with Leonard Harrington. "We just got too many nails into the coffin."

Those nails started last year with the region's housing crisis, continued this spring with soaring gasoline prices and ended with this fall's financing crunch.

A couple of years ago, the dealerships were selling more than 200 vehicles combined per month. That dwindled to about 120 a month this summer. Harrington said this fall they've been selling about 50 cars per month.

"I've been in this business 27 years, and there's never been a time like this when everything went bad all at once," Harrington said. "We just can't keep going."

The Chrysler, Dodge and Jeep dealership will leave Turlock for good, Harrington predicted. He said those brands have too many dealers, so the financially troubled U.S. manufacturer isn't replacing any dealerships that close. He said he isn't sure what will happen to the Subaru franchise in Turlock.

Smith Chevrolet Cadillac, also in the Turlock Auto Plaza, is not affiliated with Harrington and Field and remains open.

Field and Harrington have been partners since 1993, and they opened the Turlock Auto Plaza in 1997. Together their companies sold about 24,000 new and used vehicles in Turlock, Harrington estimated.

They'll have to unload about 400 vehicles, the last of the inventory, before the end of the year.

"We're marking down prices drastically ... probably about 40 percent," Harrington said.

Field said "the bank is going to help us move things out" with special financing for buyers.

Banks weren't so cooperative when the owners tried to save their dealerships.

Harrington said credit terms were so tight this fall that it was tough for buyers to get car loans unless they had credit scores above 720.

Lenders also have been unwilling to offer the dealers more loans.

"We've got a lot of equity out here (in land and buildings), but we haven't been able to access it," Field said. They also tried to negotiate some kind of funding from Turlock's city redevelopment funds, he said.

In June 2006 they borrowed more than $3.8 million from an Ohio bank to build the Turlock Subaru dealership.

"At the time when we broke ground, it was a great decision," Harrington said of the loan.

Now they'll try to sell their property -- nearly 12.6 acres on Auto Mall Drive -- to avoid bankruptcy.

They announced the bad news to their staff Monday. At the peak of their business, they had about 100 employees, but those numbers dwindled as sales declined.

Harrington said most of the staff knew the dealerships were in trouble.

"I don't want to see anyone else go through this," Harrington said.

Some already have.

In October, Friendly Chevrolet in Escalon and Curt Hughes' Generation Motors in Modesto, which sold Isuzu, Kia and Lincoln-Mercury, closed their doors.

"I'd like to think we've hit bottom," said John Gardner, who owns Central Valley Automotive in Modesto. His dealerships also sell Chryslers, Dodges and Jeeps, along with four other brands. "I think the rest of the dealer base (in Stanislaus County) is very solid."

Bee staff writer J.N. Sbranti can be reached at jsbranti@modbee.com or 578-2196.

This story was originally published December 10, 2008 at 12:52 AM with the headline "5 Turlock auto dealerships calling it quits."