Auto dealership closes down on Saturday

Scarff Auto Center in Kalispell is closing its doors this weekend.

“We close up the shop Friday and the sale wraps up Saturday,” General Manager Greg Scarff said Monday. A liquidation sale this week is helping cut inventory.

After that he’s not sure what he and his brother Doug, who bought Korn Buick in 1993 and transformed it into Scarff Auto, will do.

It’s been a tough summer across the automotive industry, and it’s no different for the Scarff brothers.

In May, Scarff Auto Center was one of 1,124 General Motors dealerships nationwide that learned their franchises wouldn’t be renewed when they expire in October 2010. Scarff Auto tried but couldn’t find another new-car franchise.

Then came “the major change in bank attitudes,” according to an announcement on Scarff’s Web site. Banks severely clamped down, he said, when it comes to financing both car buyers and dealers who needed to put vehicles on the showroom floor. It was a big reason, Scarff said, that he and his brother just couldn’t weather the next 12 months before they lost their GM franchise.

The final nail in the coffin came with the tortuous economy that drained away Scarff’s working capital despite a leaner operation.

At the peak, 23 people worked at the Kalispell dealership, Scarff said. In May there were 17 or 18. Today there are 16.

“We reacted when the economy took a nosedive,” he said. “We laid off and laid off and adjusted and adjusted.”

He said he hasn’t heard from employees what they plan to do next. This week, though, the shop has been very busy.

By Monday afternoon, he had six new and 11 used cars and trucks still on the lot.

They have been selling new vehicles to other dealers over the past couple of weeks. This summer’s nine-week shutdown at a GM plant meant many dealerships got caught with a short supply, even though there are fewer GM dealers.

To clear out the remaining inventory of cars and trucks, Scarff Auto teamed up with Don K Chevrolet in Whitefish for a liquidation sale at the Scarff lot along U.S. 93 South. Don K brought down some of its inventory and personnel to offer more of a selection.

Wheeling and dealing is taking on a new meaning this week, combining a credit-tight customer base with a dealer’s urgent need to liquidate. Scarff said his crew is working to close sales.

“Whatever it takes in this last little bit,” he said.

At the end of the day Saturday, it’s all over.

“It’s just pretty much a sign of the times. It’s happening everywhere — 140 Dodge dealers lost their flooring [financing to purchase vehicles] with the bank, and they didn’t even lose their dealerships,” Scarff said.

He said he predicted a year ago that the face of the new-car business in Kalispell would be drastically different by now. He’s making that same prediction for 12 months from now, and said more dealerships will go out of business in the coming months.

“If you can’t secure flooring somewhere,” he said, “you’re out of business.”

Reporter Nancy Kimball can be reached at 758-4483 or by e-mail at nkimball@dailyinterlake.com