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Chrysler To Suspend Dealer Reward Program To Cut Costs

December 30, 2008: 11:57 AM ET

DETROIT Chrysler LLC, looking to cut costs, will suspend its lavish dealer reward program for the first time since 1963.

The reward - given to the auto maker's top 100 best selling dealers in 2008 - was to be an all-expenses paid trip to the Hilton Los Cabos Beach & Golf Resort in Mexico from March 15 through March 19.

Chrysler decided to suspend the program shortly after receiving word that it, along with General Motors Corp. (GM), would receive $17.4 billion in federal government short-term loans to survive one of the worst sales downturns in more than 25 years.

"We hate to see the reward go but its probably a smart move given the times," said one dealer who asked not to be identified because there has been no official announcement.

"In the spirit of shared sacrifice, Chrysler and its dealer council have decided that Chrysler would not hold this year's "The Club" national dealer meeting," Chrysler spokesman Stuart Schorr said in an interview. "We will continue to measure, and honor locally, our top performing dealers for their accomplishments."

The move helps Chrysler save costs and sidestep a potential repeat of the American International Group Inc. (AIG) fiasco. The world's largest insurance company drew congressional and public ire in October after reports that the company spent $440,000 for a corporate retreat at the St. Regis Monarch Beach resort in Dana Point, Calif.

AIG spent the money a week after the Federal Reserve gave an $85 billion emergency loan to keep the company from going bankrupt. AIG said the event had been planed a year in advance of the loan and that the event was held by an AIG subsidiary and attendees were "top business producers."

Chrysler dealers were to be flown into the Hilton, where rooms start at $399. Golf rates, offered at four courses, start at $210.

LINK: Chrysler To Suspend Dealer Reward Program To Cut Costs
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