IPSWICH — Mike O'Keefe always knew what he wanted to be when he grew up: a car dealer, but not just any kind of cars.
"I was a poor Irish kid who grew up in Salem whose family always drove Chevys," O'Keefe said.
He paid his dues and 13 years ago realized his dream when he bought Lannan Chevrolet on Route 1A in Ipswich.
There's been a Chevrolet dealership in Ipswich for more years than most people there have been alive, but that history and O'Keefe's dream has ended.
Wedded to a manufacturer he says dragged its heels adapting to a changing market, O'Keefe was unable to withstand the additional strain of an economy in free fall and closed his doors on Friday. Now, his 23 employees, along with O'Keefe and his son, Matthew, are looking for new jobs.
"I feel like I'm at a funeral," O'Keefe, 56, said from behind the desk in his office yesterday, the silence from his nearby showroom reinforcing the comparison.
In a letter to customers, O'Keefe advised them that Sudbay Chevrolet in Gloucester is prepared to handle their service needs. The picture is fuzzier for his former workers.
"It's a very, very heart-wrenching, painful thing to put people out on the street in this economy," O'Keefe said. "I haven't slept for weeks."
The trouble began with skyrocketing fuel prices, he said. Customers were shopping for vehicles that sipped gas, while Chevrolet's heavy-duty pickups and sport utility vehicles, Suburbans, Silverados and Tahoes, formerly profitable mainstays, became guzzlers that sat on the lot.
Contractors who used to buy replacements for their aging trucks were feeling the pinch and delaying purchases.
Environmentally sensitive buyers, or those looking to cut back on their trips to the pump, were kicking the tires on hybrid vehicles, and General Motors and its brands were "late to the market," O'Keefe said.
"The Japanese are way ahead of us," he said. "They eroded the market share of the Big Three."
His franchise agreement prohibited O'Keefe from teaming up with another manufacturer to boost sales, but even if it didn't, there aren't any other desirable franchises available locally, he said.
In the world of car dealerships, O'Keefe has always been pretty small potatoes. In the best years, he'd sell 75 to 80 cars a month. Lately, he's been lucky to see half that much "iron over the curb," industry parlance for inventory moving.
During August and September, GM tried to boost sales with its "employee pricing" promotion, offering customers the same deals it gives its own workers. It was great for customers, but not so much for dealers, O'Keefe said.
A Chevy Suburban that cost O'Keefe $50,000 could be had for as much as $2,000 less than that, he said, and the day it was driven off the lot, he had to write a check for $50,000 payable to the manufacturer.
"Then you had to wait 90 days to get some of that money back from GM," he said.
In good times, dealers have been willing to live with those kinds of losses because they hoped to get decent trade-ins, and used car sales have been where the money is for years.
But with the economy in the tank, people aren't even buying used cars. And, while they're fixing their old ones when they break down, they're putting off any expensive maintenance they possibly can, O'Keefe said.
O'Keefe isn't the first dealer to fall by the wayside. He pointed to a recent industry publication that reported more than 600 Chevrolet dealers have already gone out of business this year, and another 400 are expected to close their doors before the end of the year.
"It's ugly out there," O'Keefe said.
With sales already lagging, O'Keefe was crippled by the ongoing credit crunch.
"In the past, we never lost a customer (because they couldn't get a loan)" he said. "Lately, we've been losing six to 10 deals a month, with good people who should have been able to get credit."
The writing has been on the wall for weeks, O'Keefe said, and while he could have delayed the inevitable for a while, he decided not to. He chose Friday because he still had enough money in the bank to make payroll, which might not have been the case two weeks from now.
"That's the real painful part, the employees," O'Keefe said. "Some of them have been here longer than I have."
