An auto dealer survives the onslaught
The economy is merciless, but Joe Manfredi is still in business after more than 50 years.
NEW YORK (CNNMoney.com) -- The Manfredis were among the fortunate ones last week, avoiding Chrysler's ax as it struck down nearly 800 dealerships across the nation.
"I'm one of those lucky dealers ... who will remain a dealer," said Corrado Joe Manfredi, who owns 11 dealerships with his son Nick in the Staten Island borough of New York City.
Joe believes that his prominence on the island has allowed him to survive. But it's hard to feel lucky these days. Over the last year, the Manfredis and other dealers have weathered the toughest sales environment since the Great Depression.
Back in August, CNNMoney.com interviewed the Manfredis as they tried to sell sport-utility vehicles amid sky-high gas prices. Since then, gas prices have fallen from their peak, while the recession has only deepened with escalating job losses and dried-up consumers.
"It's crazy," said Nick. "I never thought I'd see this in my life."
On Friday afternoon, the Manfredis said they hadn't heard from General Motors (GM, Fortune 500), which announced earlier in the day that contracts with 1,100 dealers will be discontinued. Eventually, GM plans to eliminate contracts with 40% of its 6,000 dealerships.
The Manfredis are in a unique position in New York City. Unlike other parts of the city, where people rely heavily on public transportation, Staten Island is car crazy. The Manfredis are the leading auto dealers on the island, with 3,000 vehicles, including all brands, new and used in stock.
The Manfredis employ 340 people. Many of their showrooms are located at prime spots along heavily trafficked Hylan Boulevard. Still, they had a tough time moving big SUVs off the lots when gas hit its peak.
Then, the banks got into trouble and discontinued some of the finance programs with the dealerships, temporarily putting an end to all leases, said Joe.
"The lease is the name of the game," he said. "They took that away and it's been very hard for us."
Joe said that leases are back now, but along came more trouble. Chrysler filed for bankruptcy on April 30 and brought more bad news to dealers across the land. On Thursday, the automaker named the 789 dealers who would sell Chryslers no more, spelling financial doom for many. In all, Chrysler discontinued contracts for one-quarter of its total dealer membership.
Joe, age 71, has been in the business for more than half a century. He emigrated to the U.S. from Italy in 1952. He started working part-time at a Brooklyn dealership while attending Automotive High School and taking night classes on automotive transmission repair. He was still in his 20s when he bought the dealership where he used to work. He converted it to a Toyota dealership, becoming the first business to sell that brand in New York State.
Since that time, he has gotten involved in various philanthropic pursuits, such as donating an ambulance to his hometown in Italy, helping other Italian immigrants acclimate to American society, and promoting his favorite sport -- soccer -- through the support of young athletes.
Now, he is worried about the plight of other dealers, who have worked hard to achieve their dreams, only to see them dashed. Many of them, he said, are stuck with stock they cannot sell.
"I understand the factories are in trouble," said Joe. "I understand the factories went into Chapter 11. But they did not give the dealers enough time to prepare themselves. I feel bad for these rejected dealers. I put myself in their shoes. God forbid, it happen to me."
Adding to the trouble, Joseph said that buying a vehicle in troubled times is a financial commitment that few people are willing to make.