Elsenheimer Chevrolet closing: Dealership's last day of business Wednesday
By ROB MONTANA - STAFF WRITER
Published: Tuesday, May 22, 2007 10:05 AM CDT
NORTH HORNELL - After 44 years of business, Elsenheimer Chevrolet Buick Pontiac is closing at the end of business Wednesday.
Duffy Elsenheimer, who joined the dealership - which his father started in 1963 - in 1972, confirmed the closure this morning. There have been numerous rumors about the future of the dealership, the latest being the Basil dealership umbrella would be acquiring the business, but Elsenheimer refuted that.
"All the 100 rumors you've heard about the dealership, the only one that's real is that I was closing," he said. "I'm not going to retire, I have to get a job just like everyone else so I can live my life.
"It was a great 44-year run. This is the last thing I wanted, but the numbers dictated this is what I had to do," he added. "The one thing that tears my heart in two with a knife is that I'm losing my customers."
Elsenheimer is hopeful a deal can be made for the dealership. He said there are still a few vehicles left to sell.
"Hopefully the buildings will sell so I can go back to having a life," Elsenheimer said. "The last thing I want is to have an empty building sitting there."
Rising interest rates and declining auto and wrecker sales contributed to the difficulties Elsenheimer encountered during his years in the business, eventually leading to the decision to close. He said the first bump in the road came during the oil embargo in the early 1970s, when the dealership took a hit in sales. At the same time, Elsenheimer said his dad wanted to expand the lot and get out of the land contract, so they borrowed a lot of money to do that. That was paid off through the 1970s, he said.
"Through the '70s we saw we needed something else to augment the gross income of the dealership," Elsenheimer said, "so we looked for another franchise."
A deal to get the Buick franchise from FAD Motors - located on Big Creek Road - was scuttled by Chevrolet after the deal was done and Buick had already approved it, he said.
"In those years, Chevrolet was still kingpin and they didn't care about other franchises coming in with Chevrolet," Elsenheimer said, "so Chevrolet didn't let us become a Buick dealer."
After toying with a deal to deal in fire equipment, which he said didn't pan out, Bob Elsenheimer found another revenue avenue - tow trucks. That idea got started when the dealership called to ordered a new tow truck, and Century Wrecker Corp., based in Tennessee, said it was looking for a Western New York dealer.
"We did that, and it was at a time when independent wheel lifts were just coming onto the marketplace," Elsenheimer said. "You had to have them because all the low-slung cars during that time, you couldn't sling them up like you used to be able to because you'd tear the front end off.
"So, the independent wheel lifts that go under the wheels started being used," he added. "We hit that just right, and we just took off with that."
At one time, Elsenheimer Wrecker Sales was the largest stocking and selling tow truck business in the U.S.
The explosion of the wrecker business helped combat another round of borrowing - after having paid off the 1970s loans - in 1981-82, when there was another dip in sales.
"We had paid it down, but we went and borrowed it all back again," Elsenheimer said.
While the wrecker business brought in a lot of money, he said the dealership may have gotten in a bit deep, especially when the interest rates began climbing.
"We really never had the capital to be in it at the level we were in," Elsenheimer said.
The dealership had to borrow money again in 1992, after having lost $450,000 in 1991. In 1992, the interest rate dropped and sales began to climb again, and Elsenheimer's began making money again.
"We pay 1 percent over the prime rate for our floor plan stock, which every dealer does unless they own their own stock," Elsenheimer said. "When the interest rate was around 9.5 percent in 1991, we were paying 10.5 percent."
Things began to improve, but another round of rate increases and slow sales in 1997 had Elsenheimer breaking even despite record sales. In 2000, the dealership lost another $400,000, so he had to borrow funds again to stave off the impact, having paid off the previous loan.
"It was the same as before, you have 10 years to pay it off, it kept us in business," Elsenheimer said.
In 2003, he knew Carbone was looking to close its Hornell dealership, so Elsenheimer approached it about acquiring the Buick, Pontiac and GMC franchises. He didn't however, have the capital to do that, so through a joint deal brokered by Don Simmons, Elsenheimer's picked up the Buick and Pontiac franchises.
That helped the business, but just for a few years.
In 2006, Elsenheimer said he lost another $450,000, though $300,000 of that came in the first six months of the year, so he stuck it out. But 2007, showed things were not improving. January and February both brought $50,000 losses, and March 10 Elsenheimer made the decision to close the dealership.
"I was walking across the shop floor and said, 'No, we're shutting this guy down. I'm not going through it again,'" he said.