Except for car sales, rural Utah towns faring well in poor economy
This is an archived article that was published on sltrib.com in 2008, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

RICHFIELD - In times like these, Joe Betar doesn't really like being cast as a barometer of economic tides.

He sells Chevys and Dodges at Classic Motors in the central Utah town of Richfield - a postcard of small-town America.

For Betar, times are tough, the worst he's has seen in 26 years in the car business. Sales at his dealership are off about 30 percent.

"We're a leading indicator in a multilayered tsunami of economic problems," he lamented at his Main Street showroom, where things are much too quiet.

Sales of new cars hit the skids last fall when gasoline and diesel prices went through the roof. Then the housing bubble burst along with the stock market. The ensuing credit crisis paralyzed many aspects of the national economy.

Looking down a row of four-wheel-drive diesel pickups, Betar heaves a sigh.

"These things used to sell like hotcakes. Now, they're difficult to get rid of."

Like Detroit automakers, pickups were Betar's bread and butter. But almost overnight, they stopped selling. Worse, return customers were informed the value of their three-year-old trucks had plummeted and were worth less than they owed on them.

Not only was his inventory losing value by the day, some loyal customers were downright mad.

"Imagine having a yard full of cows that you'd paid $3,000 a head for," Betar explained. "And then you woke up one morning and they were only worth $500 a head. That's pretty much what happened."

Now, not only are trucks not selling, nothing is.

Business is so slow Betar spends a lot of his time in the service shop doing repair work. While sales are down, there is a little bit of good news. The service end of his business is up, as customers keep aging cars on the road longer.

From the looks of things, Classic Motors could be more of a canary in a coal mine - the first to feel the pain - than a true barometer of the present economy here.

Unlike places like California and Florida, there aren't a lot of housing foreclosures in Richfield and surrounding areas in Sevier and Sanpete counties.

Folks around these parts tend to be conservative when it comes to financial matters, said Richfield Mayor Brad Ramsay.

"People in rural Utah plan for tough times. Even during good times, we don't go overboard," he said. "We're isolated from a lot of the problems plaguing America."

Although a U.S. Department of Commerce report issued Friday showed consumer spending down sharply across the country, Richfield's economy - with the exception of the car business - seems to be OK.

At Ogden's Superstore, just down the street from Classic Motors, people are still buying appliances and electronics, as well as furniture and floor coverings, said Ryan Barclay.

"We're level with where we were last year," he said. "And that was our best year."

Ogden's sells a lot of appliances to housing contractors, Barclay noted. Although new housing starts are down, remodeling jobs are up. And that has kept business steady.

Municipal sales tax figures back that up, according to Richfield Finance Director Mike Langston. While tax revenues from new car sales are down 29 percent during the three-month period that ended Sept. 30.

Overall, sales tax receipts are down just 1.5 percent for the same period last year.

That phenomenon also can be seen in Carbon County.

Car sales at Gus Kalatzes' dealership, Price Auto Group, are off about 30 percent for the quarter, he said.

"The truth of the matter is, everybody is scared. Nobody knows what's going to happen next," Kalatzes said of the financial and credit crisis. "I think we'll survive. But I don't know if the [auto] manufacturers can survive."

Elsewhere in Price, business is good, said Mayor Joe Piccolo.

The city's sales tax revenue is holding steady, if not up a little compared to the same period last year.

"People in rural Utah are realists," Piccolo said. "We don't borrow what we can't pay back."

And there still is money to borrow, particularly for new cars, said Dale Woolsey at Richfield's SEA Credit Union.

"We've got money to loan out, but not many customers coming in," he said. "We've had a pretty slow period for the past month or so."

What it boils down to is people are unsure of what the economy holds, Betar said, surveying a restored 1953 Ford and 1955 Chevy that adorn the showroom at Classic Motors.

Whether the national economic crisis creeps into other sectors of the rural Utah economy probably depends on how long it lasts.

"These things usually take two years to bottom out and sort themselves out," he said. "And then they usually recover."

Classic Motors has been on Richfield's Main Street since 1936 and Betar believes it will be there in 2036.

"People will always need transportation," he said. "I'm not sure exactly what the business will look like in the future. But people will need a way to get from Point A to Point B."

csmart@sltrib.com

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