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Nardelli: New dealer body will be stronger, more profitable

Posted Thursday, May 14, 2009, 11:53 am in Employee News

Last modified on Thursday, May 14, 2009, 11:55 am.

Dear Employees,

As an important part of our creation of a new company with Fiat, today we took a major step toward rightsizing our U.S. dealer network and aligning it with the realities of a smaller overall market. Our goal is to create a dealer network that is stronger, more profitable and better able to meet and exceed the high expectations of today’s car and truck buyers.

To begin this difficult process, Chrysler LLC today filed a motion with the U.S. Bankruptcy Court seeking to reject certain U.S. dealer agreements, and submitted a list of U.S. dealer agreements to be assigned to the buyer of its business assets. Subject to court approval, 2,392 Chrysler, Jeep® or Dodge dealers will continue with the new company in a global alliance with Fiat once the sale is complete. Also, pending court approval, 789 current U.S. dealers will see their agreements with Chrysler LLC rejected and will discontinue selling new Chrysler, Jeep and Dodge vehicles effective June 9.

We appreciate the support of all of our dealers over the years and sincerely regret the need to take the painful action of discontinuing our relationship with some of them. As you know, the auto industry is going through an unprecedented falloff in sales in the United States and international markets. We have adapted by reducing the number of vehicle models we build, our production capacity and employees. Now we need to make similar reductions in the size of our dealer body.

The decisions to accept and reject dealers were based on an objective, data-driven review process that was rigorous and thoughtful, taking a number of factors into consideration. We plan to maintain “business as usual” with all of our dealers through this transition, including honoring warranty and incentive payments. We are committed to working with all dealers to ensure an ongoing positive relationship with customers. To ease the burden on dealers whose agreements have not been assumed, Chrysler will work to assist in the redistribution of new vehicles and parts currently held in their inventories.

As I wrote Tuesday, we have signed an agreement with GMAC Financial Services to provide automotive financing products and services to our dealers and customers going forward. A stronger dealer network, supported by GMAC’s long-term finance options for dealerships and customers, is critical to our viability. A smaller dealer network will help increase sales and profits at individual dealers, enabling them to better compete with our marketplace competitors instead of battling each other for market share.

Additional information, including the motions filed, is available at Client Home.

Thank you all for the support you’ve given our dealers through referrals and by continuing to be informed and optimistic ambassadors for Chrysler, Jeep® and Dodge products. Our quality has never been better and our fuel economy performance is improved on 73 percent of our current models. With our ENVI electric-drive vehicles, all-new versions of the Jeep Grand Cherokee, Chrysler 300, Dodge Charger and Dodge Durango, and access to Fiat platforms and technology soon to come, our customers — and all of us — can look forward to even more exciting vehicles from a new and vibrant Chrysler in the near future.

Bob
 
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