Eagle Auto Mall awarded back its Chrysler franchise rights

06/29/2010 12:00 AM |

BARBARAELLEN KOCH PHOTO
Eagle Auto owner Mark Calisi has some pre-owned Chrysler’s at the dealership in Riverhead and will be getting new models in 40 to 60 days.

Of the 789 car dealers nationwide who lost their Chrysler franchises as part of that company’s bankruptcy process, only 15 so far have been awarded them back.
Eagle Auto Mall of Riverhead is one of them.
Owner Mark Calisi said he found out last Wednesday that an arbitrator had given him back his Chrysler Jeep franchise on Route 58.
“Probably about 25 people, including both employees and vendors, will be positively affected by this ruling,” Mr. Calisi said Tuesday.
The arbitration process was ordered by Congress after Chrysler, of which the government owns 10 percent, agreed to follow one bankruptcy plan but then executed another, according to Mr. Calisi.
“Chrysler had said it was eliminating dealers that were poor performers and that multi-lined,” Mr. Calisi said, referring to dealers who sell other brands, as does he. But it allowed some poorly performing dealers, and some multi-line dealers, to keep their franchises. “What was happening across the country was so egregious that Congress had to step in,” he said.
U.S. Senator Charles Schumer’s office was very helpful in getting Eagle through the arbitration process, Mr. Calisi said.
Chrysler’s ownership is now divided among the United Auto Workers (55 percent), Fiat (35 percent), and the United States (10 percent).
During arbitration, it was determined that some of the dealers who multi-lined were allowed to keep their franchises, and in other cases, Chrysler even added new multi-line dealers, Mr. Calisi said. Eagle Auto Mall also couldn’t be called a poor performer, Mr. Calisi asserted.
“At one point, we were more than 200 percent higher than the minimum performance standards set by Chrysler,” he said. “We also exceeded by millions what Chrysler required us to have available in working capital.”
Yet some of the dealers who kept their franchises were below the performance requirements, he said.
“None of it made sense,” Mr. Calisi said.
The arbitration process took two days, on June 6 and 7, and the decision was rendered on June 23. More than 200 dealerships reportedly have appealed the company’s decision to strip their Chrysler franchises. Eagle Auto Mall had between $18 million and $20 million in lost revenue as a result of losing the franchise, Mr. Calisi claimed.
The irony of the decision was that, with no other Chrysler Jeep dealer in the area, customers would buy another brand of car, Mr. Calisi said. In addition, when he bought inventory from Chrysler, it made money, which the company could use to pay down its debt.
A silver lining that resulted from the temporary loss of his right to sell new Chryslers was that Eagle Auto Mall became the largest dealer of pre-owned Chrysler, Jeep and Dodge cars in the northeast, Mr. Calisi said.
Eagle Auto Mall also got back its franchise to sell GEM cars, which is Chrysler’s electric car line.
In addition to Chrysler, Jeep and GEM cars, Eagle Auto Mall also sells new cars from Chevrolet, Mazda, Volvo and Kia.
Mr. Calisi said he expects to begin receiving new Chrysler cars within the next 40 to 60 days as a result of the ruling. And he says he’s looking forward to it.
“Chrysler is a great company with a great product and all I want to do is sell them.”
tgannon@timesreview.com