I want to let you know what’s going on with our partner Chrysler, and how it affects each of us and our company.  I’ve had a relationship with Chrysler since my father opened his franchise in Ashland in 1946.  I believe in the company, and I believe in their cars and trucks. Today, President Obama announced his support for them as well.  Our partners at Chrysler have filed for reorganization.  As some of you might not realize, there are two different types of bankruptcy available to companies.  The first type, Chapter 11, allows Chrysler to work with its creditors to restructure the company’s debt, and to stay in operation. The second type is known as Chapter 7.  This type of bankruptcy means that the court is going to sell the assets of a company to repay creditors.  Chrysler has filed for Chapter 11, and they are going to continue making cars, trucks, and SUV’s.

This is very good news, not just for Chrysler, but for Lithia as well.  It’s going to help Chrysler become a stronger company and reduce its costs. We look forward to introducing Fiat’s fuel-efficient vehicles to the American consumer.

It also means that Chrysler will be looking to end their franchise agreements with dealers in metropolitan areas where there are several dealerships competing with each other and driving down the value of the vehicles that Chrysler sells.

As you know, Lithia’s strategy has been to purchase stores in small to medium sized markets and upgrade the facilities to conform to manufacturer standards.  We believe that fewer than four of our stores will be impacted by Chrysler’s dealership consolidation plans.

You should feel good when I tell you that as a management team, we’ve been working since last summer on a variety of different plans.  Before the automakers went before the Congress to ask for loans, we were already beginning to work on different scenarios to keep our company healthy.  Those plans are being constantly reviewed and updated, and are ready for use if necessary.  There is one part of each plan that is consistent.  It’s critical that we keep making our customers happy. Keep servicing their vehicles, keep selling them the cars they want, and keep giving them reasons to want to return to us for all of their vehicle needs.  Our company is successful because YOU take care of our customers.

Thanks for everything that you do,
Sid