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After struggling financially for years, Chrysler filed for bankruptcy, and within weeks delivered the ultimate indignity: the cancelation of the Reed Brothers Dodge franchise, robbing the business of its only new car brand. Battered by the recent recession, the third-generation family business reinvented itself. As the world seemed to be collapsing around it, Reed Brothers Dodge drew on its traditions, got creative, and managed to survive a bit longer.
Chrysler Comes Apart, 2007-2009
In 2007, Cerberus Capital Management bought Chrysler for $5 billion. Soon after, America’s economy slid into recession. Due to poor sales and debt, Chrysler had to declare bankruptcy. The federal government intervened and eventually Dodge came under control of Fiat, a European automaker known for its small cars.
In 2008, sales plummeted further. With gasoline at $4 a gallon, big cars and trucks – Chrysler mainstays – were barely selling. Chrysler and General Motors Corporation, once the world’s largest automakers, were running out of cash. They begged the government for help. With the company nearing financial collapse, President George W. Bush agreed to lend Chrysler $4 billion.
In 2009, after years of mismanagement, and months of hanging on by a federal loan lifeline, Chrysler filed for Chapter 11 bankruptcy protection and terminated 789, or about 25% of its dealerships by June 9.
A Devastating Letter
Whether a franchise was run by a second- or third-generation dealer, or was older than even Chrysler itself, didn’t seem to matter when Chrysler decided to cut dealership ranks during their bankruptcy process. After almost 95 years selling Dodges, Reed Brothers was one of the 15 dealerships in Maryland notified by Chrysler that their franchise agreement would not be renewed.
The unraveling of the family business began on May 14, 2009 when an envelope arrived at the dealership around 9:30 am. Five paragraphs on a form letter sent by Chrysler ordered Reed Brothers Dodge out of business by June 9, 2009.
“These are extraordinary times and they call for extraordinary efforts.”
“We wish there was a better way, but there isn’t. We are grateful for the support you and your company have provided Chrysler over the years and we wish you the best under these circumstances.”
“After rejection, we want to work with you to assist in the redistribution of new vehicles and parts to ease the burden on you.”
The day the fateful letter from Chrysler arrived, brothers Richard and Barry Gartner gathered the staff together and vowed the dealership would press ahead, franchise or no franchise.
Sadly, their father, longtime president of the company Lee Gartner, passed away June 13, 2009, only a few days after his family's company was ordered out of business. Until his untimely death, he was a fixture at the dealership and he had rarely missed a day of work in almost 60 years.
Top: Form letter from DaimlerChrysler canceling the Reed Brothers franchise agreement
Left: Lee Gartner, who passed away in 2009
Chrysler would not buy back any of the new cars and trucks still on the Reed Brothers lot, that had been purchased by the dealership from the factory. During the worst economic downturn in a century, Reed Brothers Dodge had to sell--in 26 days--every new vehicle on its property. All Dodge-branded signage had to be stripped from the premises.
At the same time, the owners of Reed Brothers also had to map out a new game plan. Would they be able to retain their employees? The recession was purging hundreds of thousands of people a month from payrolls. Nothing was certain.
To say that Reed Brothers had so much to do in so little time would be an understatement. Phasing out a new car franchise is an involved process, and a month is hardly ample time. Building an independent operation is equally time-consuming. The signs standing outside on Rockville Pike still said Reed Brothers Dodge, but inside, a new business was forming...
Reed Brothers Automotive
Reed Brothers executed a change in its structure – and its name – but found a way to serve the local community as it had for decades. The company changed its name from Reed Brothers Dodge to Reed Brothers Automotive and continued on as a used car dealer and repair shop.
Pictured: unsold Dodge vehicles on the lot were eventually towed away.
Old "Reed Brothers Dodge" signage comes down by June, 2009.
New "Reed Brothers Automotive" signage going up on the property, to advertise the newly-formed business.
Dealership Property Sold 2012
Unfortunately, the rebranding and creative business model pivot was short-lived. Reed Brothers Dodge reluctantly announced the closing of their 97-year-old Rockville, Maryland dealership with a formal press release.
After almost a century of serving Rockville, the dealership property went to settlement on August 30, 2012, two and a half years after their franchise had been terminated.
Silverwood Companies of Reston, VA put the dealership under contract, then won annexation into the City of Rockville, and ultimately conveyed the property to apartment builder, The Bainbridge Companies, whose future plans included constructing a six-story residential building and parking structure.
The buildings on the property that was formerly Reed Brothers Dodge were razed starting Thursday, May 16, 2013.
At left, real estate listing for the dealership property
Below: photos of the demolition. (use the arrows to navigate through the slide show)
These photos of the future Bainbridge Shady Grove Metro apartment building under construction in 2013 show the "Reed Brothers Used Cars" sign, still standing on King Farm Boulevard. The last remaining remnant of the dealership’s former life, the sign remained throughout the construction project.
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