Crisis on Dealers' Row

"If you're weak in any aspect of the game right now, Darwin is alive and well," Brian Benstock told me. "It's survival of the fittest. In a good economy you can get away with not being good at any one aspect of the game. Right now you can't."

Benstock's bright, laboratory-clean, new-car showroom seemed reasonably busy. A board facing the front door listed more than a dozen sales appointments, telling customers which sales associates to talk to.

But his new-car sales were down about 25% compared with last year, Benstock said.

"When that happens quickly, your staffing has not been reduced by 25%," he said. "Your mortgage has not been reduced by 25%. Your inventory has not been reduced by 25%. In fact, your inventory is now 25% higher plus whatever the next allocation of vehicles coming in represents."

That's where the other aspects of the game come in. Used cars and the parts-and-service department have to make up for all that lost income.

"Seeing what's going on at those other stores really makes us focus on those weak points," he said.

Paragon recently enlarged its service department, tripling the number of lifts for cars. Service is now open all day Saturday and on Sunday, bringing in business that used to go to independent shops and oil-change chains.

"We had to do a little negotiating with our own unions to get that done," Benstock said.

Now, he sees cars sold at other dealerships coming into his service department on the weekends.

Meanwhile, Paragon has also had to lay off some employees, mostly managers and marketing staff.

"Salespeople are the last people you want to let go," Benstock said. "We're going to count on our salespeople to sell us out of this."

Despite the drop in sales, he said his dealership is managing to stay in the black."We had a sales meeting on Saturday and I told the guys, 'We can be proud that our company is more profitable than General Motors, Ford and Chrysler combined," he said. "That's a sad commentary but it's true."

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