Utah dealership struggles to stay in business


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The economic crisis dragging down the auto industry has hit home in Utah. Legacy Auto Group, which owns dealerships in St. George and Orem, has largely shut down and laid off dozens of workers.

The dealership is still open but just barely. Legacy has gone to a bare bones operation while the owner struggles to arrange a new financing package. The abstract economic crisis is now a lot more real to about 70 Legacy workers here and in St. George.

For a guy who worked his way up from car salesman to owner of two dealerships, it was not a great day for Kirk Bengtzen when he had to lay off most of his 120 employees. "It was very tough," Bengtzen said. "And everybody hugged, and everybody said, ‘We'll be back.' And I told them as soon as I can put something together I'll call them."

Kirk Bengtzen
Kirk Bengtzen

He's keeping his service department open but shutting down nearly everything else, at least for now. It's not just that car sales are down, although the national auto business is down sharply, November the worst month in a quarter century. Craig Bickmore, executive director of New Car Dealers of Utah, said, "Whether it's import or domestic, car sales are off anywhere from 25 to 30 percent."

Many car dealers, even many Mazda dealers, are hanging in OK. But Legacy Mazda in Orem and Legacy Subaru-Mitsubishi in St. George are being dragged down by that mysterious force we've all heard about. "The credit crash, the credit meltdown is the principle reason," Bickmore said.

Utah dealership struggles to stay in business

Bengtzen can't buy and sell cars without borrowing money, and his bank withdrew the financing he depends on. Bengtzen said, "They don't want me to be in their portfolio any more. The car business is scary. I've had some losses this year and, obviously, that scares banks." Insiders predict there will be more blood on the floor before it's over. Bickmore said, "As this continues, the federal markets tighten, there could be some more concerns and dealers really affected."

"I think we're all getting hit pretty hard," Bengtzen said. "Luckily for Utah, we've got great, great car dealers, and a lot of them are big enough that they should weather the storm, and that's wonderful for them."

Bengtzen's hope for a turnaround is a new financing plan he's trying to get through a much bigger bank. If he gets it pinned down, he's back in business. If he doesn't get it by Christmas, he figures he's out of business.

Bengtzen says the company right now has about 500 cars and $9 million in its inventory. He says auto sales have been hurt, not just because of the economy, but because a lot of people mistakenly believe they won't be able to get financing for their loans.

E-mail: hollenhorst@ksl.com
E-mail: mgiauque@ksl.com

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John Hollenhorst and Marc Giauque

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