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Auto dealers recovering, expecting heavy business

Cars and trucks were easy prey for Hurricane Katrina, leaving them strewn about throughout the storm-torn area along the Coast and in South Mississippi.

W.E. “Bill” Lehman, president of the Mississippi Automobile Dealer’s Association (MADA), said an estimate of just how many vehicles were damaged or destroyed in the region was not available, but that the loss was obviously substantial — “massive numbers,” he said.

So, what does this mean for South Mississippi automobile dealers, and will they be in a position to handle what is almost certain to be a vehicle-buying frenzy and an increased need for parts and service?

Trying to roll on

Barry Harper Dodge in Poplarville suffered significant damage. Owner Barry Harper said the entire front fascia of the dealership would have to be replaced. He saw 15 of his vehicles damaged, with two totaled.

The inventory at his RV business, Harpertowne RVs, also located in Poplarville, suffered worse. There were 20 RVs damaged; seven are write-offs.

“We opened three days after the storm hit. We had a generator, but no air conditioning,” Harper said. “RV sales the two-and-a-half weeks after Hurricane Katrina were outstanding as people looked for temporary shelter.”

Harper said car sales had not been heavy, until the day he was interviewed for this story (September 22). He said insurance checks arriving, coupled with the fact that many Coast dealerships have been heavily impacted, has him expecting increased sales.

Chris Posey Inc. in Laurel fared better. The Pine Belt area, particularly Jones County, took a heavy blow from Katrina. But owner Chris Posey said the dealership, which reopened September 5, and its inventory came through unscathed — almost.

“Some ‘Rhodes scholars’ came in and drilled holes in eight of my cars’ gas tanks and stole the gas out of them,” Posey said.

As with Harper, car sales had been slow until the week of September 19 at Posey’s dealership. But the volume of customers was steadily increasing, and Posey said he expected that to continue. He said Chevrolet had already boosted his inventory with additional vehicles in anticipation of the expected push.

Lehman said the sales volume among MADA’s South Mississippi members has been high, primarily on the commercial side from contractors needing transportation as they come in to cleanup and rebuild.

Both Posey and Harper said their service departments were absolutely covered up with business. And both indicated that they planned to handle the increase in both sales and service with the personnel they have currently.

Coast dealerships devastated

The picture on the Coast is not pretty, and dealers are scrambling to get back on their feet, while three dealers — Preston Hood Chevrolet in Biloxi, Mark DeRussey Chevrolet in Waveland and Charlie Henderson Ford in Waveland, are total losses, according to Lehman. Preston Hood Chevrolet was in the process of building a new store near Interstate 10 before the storm, and is moving into the new location earlier than planned due to the destruction of the former store.

Lehman described the status of the surviving Coast dealers as “operational” — they had inventory and their service departments were open.

Lehman, who at press time had visited 30 of his 43 dealer-members with plans to visit 10 more the following week, said many Coast dealers brought their inventory inside to shelter the vehicles, and those that could not do that parked their cars in areas that offered some protection. In addition, dealer inventories were low when the storm hit due to recent factory incentive programs. Thus, some inventory loss was prevented.

Unfortunately, however, good news is scarce from Coast dealers. When Bert Allen, owner of Bert Allen Pontiac/GMC Inc. in Gulfport, was reached for this story, he said, “I would love to comment, but I’ve got my lawyers here now.”

Later, Butch Oustalet, who owns Butch Oustalet Imports in Gulfport and Butch Oustalet Ford in Wiggins, was contacted. He said, with much empathy, that Allen’s dealership had been heavily impacted.

Sorrow — and hope

The loss, both personally and professionally suffered by Oustalet, his staff and his dealership is severe. Oustalet lost his 150-year-old home, which was totally destroyed. So was his sister’s home, and now they, along with a caregiver, are living in a leased house in Gulfport.

Of Oustalet’s workforce of approximately 100 employees, roughly a third suffered damaged or destroyed homes, and his partner of nearly 30 years, Larry Clark, had eight feet of water in his home. Tragically, two employees lost loved ones. Not surprisingly, Oustalet talked little of his business, which suffered $2.5 million in damages, but rather wanted to optimistically discuss the recovery of the Coast and its people.

“The Coast will come back bigger and better,” he said repeatedly.

Butch Oustalet Imports was the first dealership to reopen on the Coast, going back into business September 5 exactly one week after Katrina’s landfall. According to Oustalet, optimism abounded among his team members.

Looking to reward and assist them, Oustalet made a trip to The Peoples Bank. It was closed, but Chevis C. Swetman, chairman of the bank, was there with a couple of the bank’s staff. Oustalet gave Swetman a lot of praise for what he did.

“I told him I wanted $15,000 in cash,” Oustalet remembered. “He personally got it out of the safe for me, and I signed a note for it. That was it.”

He went back, divvied up the cash among his workers, and handed them their paychecks for the week the dealership was closed. (Oustalet’s weekly payroll is $75,000.) And he also gave them a charge.

“I told them, ‘Now, go out and share your optimism with others,” he said.

When pressed about his business, Oustalet blew it off with a “We’re alright” response. Then he added light-heartedly, “Now, when you go in our service department, you have a beautiful view of the blue sky.”

Posey, who has been in the car business for 25 years, would not be surprised by Oustalet’s upbeat attitude. “You’ve got to be an optimist to be in this business,” he said with a laugh.

Contact MBJ staff writer Wally Northway at northway@msbusiness.com.

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