Leah L. Jones/The Gazette
James E. Press, president and vice chairman of Chrysler, makes his pitch for federal aid at a rally Wednesday at Darcars in New Carrollton.
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Despite the recession, a credit crisis and a collapsing industry that the Big Three automakers say will need at least $34 billion in federal loans to survive, salesman Hess Darvish says things could be worse.
"For us, it's been great," said Darvish, who as general manager of Darcars Ford in Lanham has seen his sales actually rise in recent months. "It's tough — no question about it. But we're diversified. We have great deals and great people."
"And he told me, ‘No way. There's just no way I'm buying right now,'" one dealer was heard saying to another.
In another corner of the room, dealers worried about whether Congress would actually approve the package of loans and credit lines for General Motors, Chrysler and Ford, whose executives pleaded their case on Capitol Hill on Thursday.
"We don't know what's going to happen," said another dealer, who declined to give his name.
In a rare showing of unity for an industry steeped in competition, dealers from Virginia, Maryland and Washington gathered at Darcars' Chrysler dealership in New Carrollton on Wednesday in support of the federal bailout package.
"The cost of allowing our industry to fail would be catastrophic," said Tamara Darvish, a cousin of Hess who led the rally organized by the Washington Area New Auto Dealers Association, a regional trade group.
The call for help comes as the U.S. auto industry appears on the verge of bankruptcy. GM officials announced last week that they need $4 billion in federal loans to avoid running out of cash by the end of the year, and an additional $14 billion in aid. Chrysler has asked for $7 billion in federal aid and Ford is seeking up to $9 billion in loans, though it's been seen as more solvent than GM and Chrysler.
All three have promised to streamline their operations, reduce CEO pay and invest in building more fuel-efficient and desirable models over the next few years in exchange for the money.
Though domestic cars have been losing out to foreign models for years, sales have plummeted in recent months following the credit crisis that set in this fall. Sales in November alone fell precipitously from a year ago, including a 41.3 percent plunge at GM, according to Autodata Corp. Sales of imports fell, too: Toyota's U.S. sales were off 33.9 percent last month.
It's a phenomenon that Dottie Fitzgerald, vice president of Fitzgerald Auto Malls, has watched in recent months. She started working with her brother, Jack, for the family company in 1966.
"We've been through so many ups and downs, even the gas crisis in the '70s," she said. "But this is probably the worst I've seen in my lifetime."
The uncertainty doesn't affect only U.S. brands, she said.
"People are not buying anything until this stuff gets resolved," said Fitzgerald, who said region's motorists tend to favor imports.
"There was a time when we'd sell 200 Dodges a month over on Rockville Pike," she said. "Now I'm lucky if it's six."
Fitzgerald said falling sales have forced layoffs and other cost cuts in the family's 23 dealerships in Montgomery, Anne Arundel and Frederick counties, though she declined to give specific figures. This month, the company canceled its nightly cleaning service and began having secretaries, sales staff and executives clean the showrooms and offices.
"I picked up a broom myself," she said. "Everybody has to do their share."
Losing any of the Big Three dealers could mean lost jobs in Maryland. In addition to dealerships closing, the Port of Baltimore has more than 16,000 workers who handle exports for domestic cars. Baltimore is the leading port for overseas auto exports.
GM also operates a transmission manufacturing plant in White Marsh in Baltimore County that could close if GM goes under.
"One in every 10 jobs is related to the auto industry," said John Raut, spokesman for GM's manufacturing operations in Maryland, Virginia and Delaware. "The Big Three buy more than $156 billion a year in parts from U.S. companies. This is more than just the auto industry. It's a U.S. problem."
Raut said his company is committed to going green and already plans to release more fuel-efficient and alternative energy cars by 2010, despite being on the brink of bankruptcy.
"We do have a plan," Raut said. "Unfortunately, we got into a situation where the money is not there."
Fitzgerald acknowledges that the domestic auto industry has not always led the field, but a bailout is now needed.
"You can point fingers all over the place," she said. "But the fact is that we have to focus on what we do right now."
Big Three auto sales last month vs. November 2007:
General Motors, down 41.3 percent
Ford Motor Co., down 30.5 percent
Chrysler, down 47.1 percent
Source: Autodata Corp.
