'Chrysler made a big mistake' - one dealer's story

Steve Biegler runs the dealership his grandfather started, and hopes to pass it on to his sons.

Last week, Chrysler had Biegler's Jeep sign taken down. "Beautiful day in South Dakota with one exception..." he wrote in an e-mail that afternoon.

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Hard times on dealer row

Chrysler shuttered 789 dealerships nationwide. Now these dealers and their employees are recovering from the shock and looking to the future.

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After he got his termination notice, Biegler adorned his sign with a black armband.

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(CNNMoney.com) -- After filing for bankruptcy, Chrysler in May notified almost 800 dealers around the U.S. that they would lose their franchise licenses and be kicked out of the restructured automaker's dealer network. Steve Biegler, who runs the dealership his grandfather started, was one of those targeted. Last week, Chrysler sent out representatives to finish dismantling his store's branding.

When they took down the sign last week, my emotions were up and down. One minute I was okay with it and the next I was mad as hell. It brought me back to May 14, when we received the letter from Chrysler saying we would no longer be permitted to sell Jeeps.

I'm a third-generation dealer in Aberdeen, S.D., running a business that was established in 1929. My company, Biegler's Jeep and C&S Motorsports, is one of the lucky ones -- I had sensed something big was going to happen, so I started scaling back on inventory months ago. We sold our last new car just before we got the letter.

But it hasn't been an easy ride since. For starters, we have tools and parts that are still sitting in the shop, unused. Chrysler is not buying them back. They sent us a letter, listing the closest dealers to us so that we can try to sell our stuff, but that's not much of a help. A nearby Chrysler-Dodge dealership is interested, but we have no guidance on how much we should expect to get -- 10 cents on the dollar? Twenty cents?

Also, the business itself hasn't recouped. The sports side has been doing well, but the business I lost with Jeep can't be replaced by other product lines like power sports vehicles. The businesses had complemented each other. I haven't necessarily sold more ATVs now that I can't offer Jeep.

We've continued selling used vehicles, but it's been hard to buy inventory. Those who lost their dealerships are moving more into that space, so the competition is that much tougher. Plus, people aren't trading as much because of the economy, and car rental companies like Avis (CAR, Fortune 500) and Thrifty (DTG) aren't rotating their fleets as often.

While I don't want to say how much I've lost in the past few months, it's safe to say that we're going to need expand to make up the difference. One idea I've been entertaining is a boat line. We've had to adapt before, and this will be another challenge we'll have to overcome. I'm not going to lay off any of my 13 employees just because of what Chrysler did. And I'd like to leave a strong business to my sons, who are interested in taking over as fourth-generation owners.

Then there are the customers, who really have become my friends. Chrysler made a big mistake when it failed to realize that people get connected to the dealership more than the vehicle. It's all about personal relationships, particularly in a city like ours, which has less than 26,000 people. Jeep thinks it can keep the customers that the axed dealers had. That's simply not the case. I can refer my old customers to a Jeep dealership 60 miles away, but it's more likely they'll buy a different car right here in Aberdeen, where they know the dealer.

This has definitely been a bump in the road, but the community has been supportive. I've had customers come in the store and pledge they won't buy a Jeep again. Meanwhile, our tech and parts guys have moved to the power sports side, and we've continued working as hard as we always have to maintain the business. Like all the other dealers, we will find other things to sell and support the customers we've had in the past.

We're not going away.