WADSWORTH — Renacci-Doraty Chevrolet will close June 15, putting about 40 employees out of work, after owner and congressional candidate Jim Renacci lost his fight with General Motors to keep it open.
“I was fighting because I was really trying to maintain the approximately 40 jobs in the community, and General Motors basically said its restructuring plan did not support the current location in Wadsworth or my plan to ... build a new facility in Wadsworth,” Renacci said.
Running against U.S. Rep. John Boccieri, D-Alliance, for the 16th District seat, Renacci said the closing reflects failed decision-making by President Barack Obama and majority Democrats in Washington.
“Washington forcing businesses to close is beyond deplorable,” the Wadsworth Republican said. “When Obama first announced that the government could dictate whether Americans could continue to operate privately owned businesses, I truly feared the darkest days of American capitalism.”
Renacci and co-owner William M. Doraty took over the dealership, 869 Broad St., when it was in jeopardy of closing in 2007. The previous owner, Mickey Miller, was convicted on 37 counts of laundering drug money after an undercover FBI sting that year.
Renacci said he “stepped in to save jobs in the community I’ve lived in for 27 years.”
The federal government loaned General Motors $50 billion in 2009 when the company declared bankruptcy, leading to 61 percent government ownership in the company. The company posted an $865 million profit in the first quarter of 2010, a dramatic reversal from the same time last year, when it reported a $6 billion loss.
Ryndee Carnee, manager of dealer communications at GM, said about 2,000 dealerships were given “wind-down” agreements when GM began the bankruptcy process. Out of those, 1,160 took advantage of federal legislation passed in December that allowed dealerships to appeal their agreement through arbitration. In March, GM announced it would reinstate more than 600 of the dealerships. Renacci-Doraty was not among them.
“All of the dealers were measured by the same criteria, objective, metrical criteria,” she said. “The dealers who were selected to receive the wind-down agreement were evaluated on customer satisfaction, profitability, location, the number of vehicles they sold.”
She said that in cases like Renacci’s, the dealership has gone through all the avenues to stay open and the decision to close is binding.
Renacci said although he was “unable to overcome” the government’s restructuring plan from the outside, he is now “even more committed to restructuring our government’s plans from the inside.”
“It’s as if they believe this is a game of Monopoly without real-life consequences, but it is real life, and the job losses are real,” he said. “We need to remove failed leaders from power, and this makes it more evident.”
Boccieri, however, pointed to an 11 percent rise in General Motors’ sales in the United States and a 24 percent rise globally in the first quarter of the year as evidence the restructuring plan is working.
“The fact of the matter is GM would have closed many more dealerships months ago had it not been for efforts to restructure the company,” he said.
He said the decision to close the dealership was based on poor customer satisfaction, and the closing “calls into question whether (Renacci) ran a good business in the first place” because GM reinstated other dealerships in March.
“It’s like Bernie Madoff blaming the stock market for bad investments,” he said. “It’s the most dishonest thing in this campaign to date.”
Gaby Adler, midwestern regional press secretary for the Democratic Congressional Campaign Committee, said Renacci announcing the closing of the dealership through his campaign shows he is politicizing the dealership’s closing and resulting job losses to buffer his campaign.
“Shame on Jim Renacci for trying to turn the news of his dealership and resulting job loss into political fodder for his congressional campaign,” she said in an e-mail. “Despite Renacci’s efforts to point fingers and claim political motivation was behind the closing, the fact remains that Jim Renacci is the only one playing politics here.”
Impact on Wadsworth
Ward 4 Councilman Bruce Darlington said another dealership, Chrysler Jeep, also closed because of the restructuring of Chrysler. Four years prior, Wadsworth Ford closed its doors. The three dealerships were once in the same area of Broad Street.
“Now we’re wondering what we’re going to put there,” he said. “That’s a lot of real estate.”
Renacci said in the best of times, Renacci-Doraty Chevrolet produced “between $1 million and $2 million in tax revenue.”
The loss of tax revenue from all three dealerships will inevitably have an impact on the local economy, Renacci said.
“Sales tax, real estate tax, income tax — multiply that times three, and that’s the economic loss to both the county and the city,” he said.
The closing also has an impact on the 40 dealership employees, all of whom will be out of jobs by mid-June.
Automotive technician Mike Schmock has worked at Renacci-Doraty for more than two years, and has been at his job for 40 years. Although he is looking for another job, he said he most likely will collect unemployment for the first time in his life next month.
“(Renacci) offered to move the dealership to the highway, where (GM) wanted it, but they ignored him,” Schmock said. “You know what? It was as un-American as it could get.”
While the bailout might have saved jobs elsewhere, Renacci said the closing of his dealership shows that government “takeover” of the company was a bad decision in the first place.
“In the free market, there is always risk of failure, but when the government takes over, failure is assured,” he said.
Contact Lisa Hlavinka at (330) 721-4048 or firstname.lastname@example.org.