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For 33 years, Magarity Chevrolet in Flourtown was more than a business —it was a close neighbor to its customers and a sponsor of local children’s sports teams. Now that neighbor is forced to close shop.
Proprietor Joe Magarity, a resident of Oreland, lost his dealership back in June, and will move out of his empty building on Bethlehem Pike during the next few months.
“We had a lot of really loyal customers, and I wanted to thank them all for their loyalty over the years,” Magarity said Wednesday in his office, which still has Phillies photos on the wall and office supplies on the desk. “We became really close with a lot of our customers, and I’m sorry for this for them as much as I am for myself, my employees and my family.”
Despite three decades working alongside his father and son, Magarity lost the family business in a process of “backward logic” on the part of the parent company, one that drove dealers out of business.
Last June, General Motors told certain dealers to sell off their lots by October 2010. The problem was Magarity had a whole car lot to sell, and he wasn’t allowed to say a word. He hired a lawyer, he said, because he felt it was unjust.
“We were here for 33 years and we’re profitable every year,” he said.
According to Magarity, GM’s reason for targeting his dealership was geographical: The company had too many dealers in the Northeast, he said.
Nine months after he received his notice from GM, the company filed for federal bankruptcy, and Congress recommended an unbiased arbitrator help get the dealers back in business, he said.
“The problem is the law in Congress had no teeth because there’s no compensation,” Magarity said. “In other words, in the nine months they put me out of business, I started to lose money more and more as I ran out of cars and had to let people go,” he said.
Only big chains with eight or nine dealerships could afford to go back into business, he said.
“The thing that bothers me the most, really, is the randomness of General Motors being able to do this to a prospering family business,” he said.
One of the reasons the company claimed federal bankruptcy was to cut its dealer body, Magarity said, because with federal law it could trump state laws protecting the little guy.
Toyota, for example, has fewer dealers, who are more profitable, he said.
“I think it was backward logic,” he said.
He tried to run his used car dealership and his service department, but the overhead was too big, he said. It was a challenge to get enough used cars and sufficient financing.
“Dealers have tried, but it’s become very difficult,” he said.
Letting his employees go was the worst part of all, Magarity said, although he has secured jobs for most of them, thanks to his connections from years in the business.
Magarity was chairman of the 2009 Philadelphia Auto Show and has served as vice president of the Auto Dealers Association of Philadelphia.
What’s next for the property could be sports-related. The Magarity Tennis Club, which his family bought with the dealership in 1976, will continue to operate, and the 6-acre property that holds the dealership offices could become a sports area, he said.
Magarity is still in talks about a possible lease and couldn’t divulge much at the time of the interview.
Magarity has coached sports teams in town for years — 20 of them with the Holy Martyrs CYO team — and the dealership has sponsored school and community sports, he said.
His immediate need is to try to lease the building so he can become financially stable. Then, he’ll look to the future.
A proposal to change the zoning of Magarity’s property from commercial to village commercial, meant for smaller businesses, would hamper his ability to redevelop, Magarity said. The application is on hold in Whitemarsh Township and might be heard late May or June, according to the township’s zoning office.
