By Dan Shaw, Evansville Courier & Press
Kelley Chevrolet soon will become part of Kenny Kent Chevrolet.
The two Evansville dealers announced on Tuesday the merger of their businesses. Todd Stephens, Kelley Chevrolet general manager, said the deal wasn't prompted by General Motors' declaration of bankruptcy a month ago. The two businesses have been working on it for months, he said.
"It's going to be long-term," Stephens said. "We are going to be in a way better condition financially to take care of our customers and employees."
Stephens expects the Kelley site, at the corner of Heidelbach and Diamond avenues, to remain open for another 60 days. During that time, employees will continue offering a small number of new and used vehicles, as well as performing emergency repairs. But most customers will be directed to the Kenny Kent lot at the corner of North Green River Road and the Lloyd Expressway.
Stephens said about 40 Kelley employees will remain with the merged business, which will have the Kenny Kent name. But a few, likely 10 or less, will lose their jobs, he said.
Stephens said Kelley plans to move most of its 200 new and used vehicles to the Kenny Kent site. When the two businesses are combined, the resulting inventory will contain about 400 Chevrolets.
That will make the lot the largest seller of Chevy vehicles in Evansville. Shortly after its declaration of bankruptcy, GM sent out letters to thousands of its dealers, telling them of plans to revoke their franchise rights to sell the company's new vehicles. In choosing where the franchises would be lost, GM tried to weed out dealers which couldn't claim a large market share.
Stephens said he didn't know what Kelley's letter said and that GM hasn't approved the merger with Kenny Kent. He thinks the approval will come shortly after the company leaves bankruptcy, which is expected to occur around Aug. 1.
The Kenny Kent lot will honor warranties sold with vehicles from Kelley Chevrolet. It also will take over any service agreements - such as contracts for free oil changes - signed by Kelley.
Stephens said the Kelley Chevrolet building and lot will be put up for sale. At least a couple of suitors have already expressed an interest in it, he said.
The lot at the corner of Heidelbach and Diamond avenues had once belonged to Kenny Kent. When that dealer moved to the East Side, it was bought by the Kelley chain, based in Fort Wayne, Ind. For many years, it had the name Northside Chevrolet, which didn't change to Kelley until about five years ago.
Stephens said the location was a bit isolated from the city's main commercial districts. To attract customers, the Kelley lot was forced to spend a lot on advertising, he said.
"You don't have the mall, or the Super Wal-Mart, or the Targets out here," he said.
Kenny Kent, meanwhile, is now among a large number of dealers owned by Van Tuyl Group, a management company based near Dallas.
Jim Thayer, Van Tuyl chief financial officer, said the merger will make the Kenny Kent lot a more efficient business, since it will have nearly double the inventory with the same amount of overhead.
"We look at this as an opportunity to fortify our ability to take things into the future," he said.