Chrysler Kills 11 Fewer Dealers Than Reported (789)

by Robert Farago

Published: May 14th, 2009

chrysler kills 11 fewer dealers than reported 789

Chrysler has come within 11 dealers of confirming media reports that it would terminate 800 US dealers ( dowload pdf list of 789 terminated ChyrCo dealers here). This as the bankrupt automaker steps-up its efforts to satisfy its federal overlords and prepare for Fiat’s command and control. Oh, and emerge from C11 as a viable automaker. Automotive News [AN, sub] has intercepted a memo from the corporate mothership highlighting the company’s care and concern towards the dead stores not selling. “Dealers are learning of their fate via UPS letters to be delivered this morning, the memo says. Dealers will get 23 business days for a ‘court review’ of their cases, according to the memo, from a sales manager to district dealers. ”All of this information is subject to change,” the memo says. Music to the dealers’ lawyers’ ears, presumably. Meanwhile, NADA . . .

The National Automotive Dealers Association (NADA) reckons each Chrysler dealership employs about 48 people. Using that formula, they estimate today’s ChyrCo dealer cull will throw 37,872 people out of work. Yes, well, today’s termination represents represents just 24.7 percent of Chrysler’s franchisees. So if you call this round one, pre-Fiat, you wouldn’t be going too far out on that prognostication limb, thing. AN gives us the rest of the salient details.

• Chrysler, because it is under Bankruptcy Court protection, will not be required to buy back vehicles, tools or parts from rejected dealers.

• Chrysler will match rejected dealers with accepted dealers, who will buy back parts, tools and vehicles.

• Rejected dealers will continue to sell vehicles, and Chrysler will continue to pay incentives and warranty charges until June 9.

• Chrysler says it won’t abandon retail customers, and will pay for “towing services, etc.”

• About 4 million customers of rejected dealers—“orphan owners”—will get letters explaining the situation.

Robert Farago

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Ihatetrees on May 15, 2009
Domestic Hearse: 2. Lots of remote points in the sticks were closed. Flyover, drive-by country. Areas where rural men work the land, drive trucks, battle the elements. And where do you think these buyers are going for their next new trucks, now that the nearest Dodge or Jeep point is hundreds of miles away? They'll either drive (like many import owners), pick a closer domestic brand dealer, or buy a used Chrysler product from a local indie lot / internet seller. The new auto market is best served by fewer, larger dealers. The corporate mother ship can better control the brand damage that crap dealers are capable of. Although, in my urban neck of the woods, the domestics' cannibalistic tendencies are reinforced by too many suburban stores.

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Old Guy Ben on May 15, 2009
Does this corporation have an animus against certain cities? Closing existing dealers does not preclude opening a new dealer in the area in the future. As Forbes (or someone, forgot who) pointed out, Toyota does quite well with only 1200 dealers nationwide. Perhaps they are trying to imitate that model. Apparently, most states have franchising laws protecting the dealers from getting shut off by corporate, so this is a rare chance to get rid of the weaker links.

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