Last August, Robert Weinmann operated three auto dealerships in the path of Hurricane Katrina. On the storm's first anniversary, he has two.
Katrina did minor damage to Weinmann's stores in Metairie, La., and Gulfport, Miss. They reopened soon after the hurricane hit the Gulf Coast. But his Chrysler, Dodge and Jeep dealership in Bay St. Louis, Miss., is closed. It will remain so for the foreseeable future, Weinmann says.
"I'm still affected by Katrina," Weinmann told Automotive News. "It's exhausting."
The costliest natural disaster in U.S. history devastated more than 100 dealerships in Louisiana, Mississippi and Alabama. Unlike Weinmann's Bay St. Louis store, most of them reopened within weeks. Many dealers say they had been selling more cars and trucks this year than they did before the hurricane struck, although sales have begun to slow in recent months.
Katrina severely damaged 61 Louisiana dealerships, mostly in and around New Orleans, says Robert Israel, executive vice president of the Louisiana Automobile Dealers Association. All but six are back in business, he says.
In Mississippi, all but two of the 36 dealerships that were hit hardest by the hurricane have reopened, says Bert Allen, who represents Mississippi as a National Automobile Dealers Association director. Allen owns a Pontiac-GMC dealership in Gulfport that was badly damaged in the storm.
Carfax Inc. estimates that Katrina damaged about 570,000 vehicles. Owners have used insurance checks to replace most of the vehicles that were wrecked in Mississippi, says William Lehman, president of the state's dealer association.
Contractors doing reconstruction work bought large numbers of pickups in the state's disaster areas, Lehman says. Both developments have stimulated sales, he says.
From January through July 2006, vehicle sales in the Louisiana parishes of Orleans, Jefferson and St. Tammany rose by 38.7 percent from the year-ago period, to 57,692 units, Israel says. Those three parishes, in metropolitan New Orleans, were the parts of the state most afflicted by Katrina.
July sales fell
But July sales in the three parishes, equivalent to counties, fell 16.5 percent from July 2005, to 5,737 units, Israel says.
In Metairie, a New Orleans suburb, Lakeside Toyota reopened within three weeks of its Katrina-caused shutdown, says general manager Keith Hanks. Its sales were up 25.9 percent in the first seven months of 2006, to 2,304 units, Hanks says. But, he says, truck sales have slowed recently as the pace of recovery work in the area has slackened.
Charlie Henderson Ford in Waveland, Miss., operated out of a trailer after Katrina hit until January, says Joe Henderson, the dealer principal. The dealership had an upsurge in sales after it reopened, he says.
But about two months ago, Henderson says, the local market for replacement vehicles reached a "saturation point." Sales at his store have declined since then, he says.
Many dealerships in the hurricane region are operating with about 20 percent fewer employees than they had before Katrina, executives of the Louisiana and Mississippi dealer associations say.
Dealers say large numbers of their workers were displaced by Katrina, left to rebuild their homes or quit for better-paying reconstruction jobs.
"Someone who had a nine-to-five job before Katrina became a roofer the day after," says Hanks of Lakeside Toyota.
Gulfport dealer Allen says his dealership suffered about $800,000 in hurricane-related damage. Insurance covered most of those costs, and repairs are 95 percent complete, he says.
But 16 of the dealership's 60 employees left after the hurricane struck, Allen says. Several of them have returned, and Allen has filled some vacancies, but he estimates he is still short 10 to 12 workers.
A year after Katrina, Allen says his dealership is "unsettled yet profitable." He cites projections that full economic recovery in the region is five to 10 years away. "It's not fun selling cars under the circumstances we are under," Allen says. "But that doesn't mean we aren't selling them and making money."
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