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Maui dealership on Chrysler's bankruptcy hit list


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POSTED: Friday, May 15, 2009

Maui's only Chrysler dealer is among the almost 800 dealers the troubled U.S. auto manufacturer wants to eliminate over the next month as it restructures.

Chrysler listed Kitagawa Motors Inc.—which does business as Island Dodge—yesterday in a motion filed in U.S. Bankruptcy Court in New York.

Island Dodge's general sales manager, Jim Wheeler, said the dealer hasn't been officially notified by Chrysler, so he's not sure what will happen.

But the Kahului dealer also sells Hondas and Subarus, as well as used cars, so Wheeler expects it to stay in business, even if the dealership loses the Chrysler operation.

“;We have other franchises, too, so it's not like we're going to go away,”; Wheeler said.

Island Dodge hasn't heard yet how Chrysler's customer warranties would be handled after a closure. Wheeler said he hoped to find out after Chrysler's official notice arrives.

A hearing is scheduled for June 3 for the judge to determine whether to approve Chrysler's motion.

Island Dodge's sales of Chrysler cars have been down over the past year. Wheeler says that's in part due to news coverage of the manufacturer's financial woes. But it's also because of the poor economy.

“;When tourism is down, when nobody is coming, when the hotels are laying off people, when the restaurants are laying off people ... naturally the sales will be down,”; Wheeler said.

Island Dodge is the only Hawaii dealer on Chrysler's list.

The automaker still will have dealers in Lihue on Kauai and in Hilo and Kailua-Kona on the Big Island.

On Oahu there are dealers in Kaneohe, Pearl City and Waipahu.

Chrysler has identified 789 dealerships it wants to close—about a quarter of its 3,200 U.S. dealerships—by June 9.

The National Automobile Dealers Association says about 40,000 people work at the affected dealerships. Many will keep their jobs, but their dealerships will be left to sell only the other brands in their showrooms, or used cars.

Chrysler said in its filing that sales are too low at many of the dealerships. Half its dealers account for 90 percent of its sales, and the company is trying to cut poor performers that compete for the same customers.