Chrysler offers to reinstate dealers

[rickaren]

Posted: 12:33 p.m. March 25, 2010
Chrysler offers to reinstate dealers




Chrysler is offering to reinstate some of its 789 terminated dealers, reversing its hard-line policy in the face of a slow and costly arbitration process that could have distracted the company from its turnaround plan.

One source familiar with the lobbying efforts of the rejected dealers said he had heard between 86 and 96 could be reinstated.

“We have not sent any letters as of this morning,” said Chrysler spokeswoman Kathy Graham.

Slightly fewer than 400 terminated Chrysler, Jeep and Dodge dealers notified the American Arbitration Association they planned to pursue binding arbitration which was authorized in legislation that Congress passed and President Barack Obama signed last December.

“I’ve heard the arbitration process has been far more frustrating both for the terminated dealers and the companies than anyone expected,” said Chuck Eddy, a Youngstown, Ohio, dealer who leads the Chrysler dealer council. His dealership was not terminated.

General Motors has sent letters of intent to 661 of 1,160 dealers it had planned to wind down. Those who want to save their dealerships have 60 days to show they have sufficient financing and can meet other criteria to continue selling GM vehicles for the indefinite future.

Until now, Chrysler had planned to defend its decision to get rid of 25% of its dealers because its smaller share of the U.S. new car market – 8.9% in 2009 vs. 11% in 2008 – simply can’t support 3,000 dealers profitably.

Tammy Darvish, a Maryland dealer and a co-leader of the Committee to Restore Dealer Rights, said she had heard from about 12 Chrysler dealers who said Chrysler officials contacted them and told them they would be receiving letters of intent for possible reinstatement.

“It’s very fluid and changes hourly,” Darvish said. “They (Chrysler) are scrambling. I think they never really accepted that they were going to have to go to all of these arbitrations.”

LINK: Chrysler offers to reinstate dealers | freep.com | Detroit Free Press

[rickaren]

Chrysler Group LLC Offers Letters of Intent to 50 U.S. Dealers

Auburn Hills, Mich. , Mar 26, 2010 - In an effort to find a mutually beneficial resolution in situations that make sense for the customer, the dealer and the company, Chrysler Group LLC today announced it is offering Letters of Intent to 50 arbitrating dealers to join its dealer network as full-line representatives. These are dealers whose contracts were rejected as a part of OldCarCo's bankruptcy proceedings last year.

The 50 dealers are in locations that offer customer service benefits and will have limited adverse impact on the dealers within our current network. Discussions to find mutually beneficial alternatives to arbitration with other dealers are under way.

The actions announced today are in addition to the 36 Letters of Intent and/or Sales and Service Agreements previously awarded to dealers whose contracts had been rejected by OldCarCo.