Tags: US | Chrysler | Dealers

Chrysler to Let 50 Dealers Rejoin Sales Network

Friday, 26 Mar 2010 12:45 PM

If your local Chrysler dealer was forced out of business by the company last year, it could soon be selling new cars again.

Chrysler Group LLC said Friday it is offering to reinstate 50 of the 789 dealers that it previously tried to drop while it was making its way through Chapter 11 bankruptcy protection.

The dealers, which the company would not identify, are in areas that can offer service to customers without hurting the remaining stores in its network of 2,334 dealers selling Chrysler, Dodge and Jeep vehicles in the U.S., the company said. The dealers being offered reinstatement have not yet been notified of the company's decision, a spokeswoman said.

The 50 dealers were among 418 that sought arbitration to appeal the automaker's decisions to terminate their franchise agreements. Congress passed a law in December requiring an appeals process for General Motors Co. and Chrysler dealers whose franchises were revoked by the companies.

Chrysler had earlier offered franchises back to 36 other dealers whose contracts were terminated.

In addition, Chrysler said it is discussing "mutually beneficial alternatives" with the remaining dealers who have filed for arbitration. A spokeswoman said the alternatives could include reinstatement.

Both automakers said they needed to make the cuts to keep the remaining dealers healthy. That way, they can invest in better showrooms and more advertising and do less discounting. But many of the affected dealers said they were treated unfairly, and many protested to their U.S. senators and representatives.

Earlier this month, General Motors Co. agreed to reinstate 661 dealers who faced franchise terminations. GM had been trying to drop some 2,000 dealers from its network. It plans to have about 4,100 Buick, Chevrolet, GMC and Cadillac dealers in the future.

The negotiations could be more complicated for Chrysler than for GM, since GM hasn't closed its dealerships yet. Potentially, dealers who remained with Chrysler and were given the franchise agreements of dealers who were shut down could sue if the arbitrator decides to reverse Chrysler's decision.

© Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

1Like our page

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

© Newsmax Media, Inc.
All Rights Reserved