Bob Charbonneau, a salesman at America Chrysler Dodge Jeep, sits at his desk on Friday.

The Providence Journal / Gretchen Ertl

WESTERLY — In his office near the small showroom floor his father opened 40 years ago, car dealer Bob Capalbo has far too much time on his hands these days.

A creased copy of Chrysler’s latest appeal to Congress rests on his desk. An arm-length away awaits his computer, where all last week he searched the Internet for updates on the grilling that leaders of the Big Three domestic automakers were taking from irate Washington lawmakers. Many of the legislators seemed loathed to the idea of a multibillion-dollar loan program to save the fate of the American car industry — along with Capalbo’s America Chrysler Dodge Jeep dealership and his 18 remaining employees.

Capalbo finally persuaded himself to stop the hour-to-hour vigil once home: “I just don’t do it after supper anymore because I like to sleep at night.”

The spectacle of the Big Three seeking billions of dollars in loans from Washington may seem a long way from the affairs of the Ocean State, but the implications are very much close to home.

Automobiles, after all, are necessities that define our lives. And while there may be no assembly plants nearby, thousands of Rhode Islanders — from car salesmen to body-shop workers, to factory workers who make car accessories — depend on the industry for their livelihoods.

Dealerships may be the most visible aspects of the industry and regionally, as around the country, once-crowded lots bordered by flapping pennants have turned vacant. At least three Rhode Island dealerships have closed their doors this year, reports the Rhode Island Automobile Dealers Association, and several other franchises have moved or consolidated.

According to one Detroit-based analytical and consulting firm, Providence actually leads the nation as the metro area with the largest decline in car dealerships for the first 10 months of this year.

The firm, Urban Science, recently reported that the Providence area had seen a 12.9-percent decline in dealerships through Oct. 31. Second was the Sacramento, Calif., metro area with an 11.7-percent decline and third was San Francisco, with an 8.7-percent decline.

“When I saw that, I said, ‘Wow,’ ” says Jack Perkins, executive vice president of the automobile dealers association. The figure was one more dismal statistic that Rhode Island, with the nation’s highest unemployment rate and highest per capita budget deficit, had a lead on.

Perkins says he was not sure how Urban Science had collated the numbers, noting that while some dealerships had sold their franchises, they were still selling used cars. But certainly there has been turmoil on the dealership front over the year.

Currently, 60 dealerships operate in Rhode Island, employing some 3,300 people, Perkins said. Of those 60 dealerships, 28 offer domestic brand cars.

Last year Rhode Island dealerships accounted for $2.1 billion in sales, which translated into $147 million in sales tax.

The implications of one of the domestic auto companies declaring bankruptcy are dire for dealerships because it would undermine confidence in their brands, Perkins said, with consumers concerned about the long-term servicing of their vehicles.

Slumping sales have already forced many dealerships, including Capalbo’s, to lay off workers in recent months.

“In normal times, we have about 30 people,” Capalbo said Friday morning. “We’re down to 18 right now.”

The work force reductions began in summer. A few of his employees left through attrition, he says. But the others he had to call into his office, usually at the end of a day, and deliver the bad news.

“I think most people knew what was happening. Some of the clerical people were very, very difficult to let go.”

The latest payroll data available shows that employment at Rhode Island auto dealers declined by 351 jobs between June 2007 and June 2008. But those figures from the state Department of Labor and Training don’t cover the toughest last few months.

Capalbo held off as long as he could after rising oil prices sent the cost of a gallon of gasoline to above $4.

He adjusted his inventory, getting rid of the bigger vehicles and ordering more economical models such as the Jeep Compass and the Chrysler Sebring. His inventory shrunk as well by about 35 percent, from a little over 100 vehicles to about 65 now on the lot.

But as the credit crisis claimed some of the nation’s top financial institutions and the economy further stumbled, Capalbo said he reduced his sales force from five to three. Those remaining three are finding themselves doing several other tasks as well, like moving inventory and driving trade-ins to shops for cleaning.

“I think we’re as lean as we have to be now,” he said. “Again all bets are off if the government doesn’t come through.”

In boom times, Capalbo’s dealership, at the intersection of Routes 1 and 78, sells about 1,600 vehicles a year, or a daily average of 5 or 6 a day.

Today, if two cars sell, Capalbo defines it as a good day.

His sales team had successfully reached that threshold 7 out of the previous 12 business days.

The decline in the car business isn’t about what the American auto industry has done wrong, says Capalbo — despite what television pundits proclaim — “It’s about the credit industry. Yesterday alone we lost two sales because we couldn’t get them financed. Both people had exceptional histories of making car payments but one was a little high on credit-card debt and the other person was late twice in 24 months on a mortgage payment and the banks just aren’t overlooking that anymore.”

The dealership’s business manager once had five or six financial institutions to choose from in helping customers finance a car purchase, said Capalbo.

“Before it was about finding the best deal. Now it’s finding a deal. Of those five or six sources, we’re pretty much down to three; three of them pulled out of financing.”

Nationally, if the car industry’s sources of credit were in good shape, the domestic carmakers “wouldn’t be going to Congress for a loan. They would be going to those normal credit sources.”

Capalbo, now 62, remembers the day in 1968 when he called his father and said he was giving up his electrical engineering job at Electric Boat to join him in the car business. His father tried to dissuade him.

“My father always thought the car business was a very difficult business,” Capalbo said, laughing. “He wanted a better life for me, but I always had a passion for cars and I still do, and it worked out well.”

Capalbo said the car business has suffered other setbacks — the gasoline shortages of the 1970s, Chrysler’s near demise in the 1980s — and he’s not sure this one is any worse.

“I’m an optimistic person. In fleeting moments, do I wonder what would happen if Chrysler didn’t make it? Absolutely. I wouldn’t be human if I didn’t think that at times. But again, deep down, I know what a great product we have. It’s a great industry and I see no reason in the world why in a year from now we’re not doing a lot better than we are and three years from now we’re flourishing again.”

It all depends, however, on Congress.

Capalbo doesn’t want to imagine the economic consequences if lawmakers don’t loan the car companies what they say they need.

Right now he pays about $10,000 a month for employee health care. “It’s so important to people and right now I don’t have any intentions of [cutting those benefits]. But again if, God forbid, they don’t approve those loan guarantees, there could be a lot of changes. The alternative is not pretty.”

pelsworth@projo.com