Chrysler dealers who were terminated and then re-instated have been left out in the cold, after a federal judge ruled that the Federal Appropriations Act, a 2010 law that opened the door for dealers to regain their franchises via arbitration, did not overrule state dealer laws that deal with dealer markets.
Amidst all the legalese, the message is clear; the 20 dealers who lost their franchises are not going to be unconditionally reinstated as full dealers. Instead they have an “opportunity” to become dealers again in the markets that they previously served. The dealers would have to start from scratch, going through negotiations with Chrysler in the hopes of receiving a “letter of intent” and a dealer agreement, as if they were a new franchise looking to set up shop and get Chrysler’s blessing.
A major stumbling block exists, in that the lapse in time from their termination until now, Chrysler may already have appointed new dealers in the market areas that they previously served. Laws exist on a state by state basis to govern dealer competition, and some dealers may be shut out of their old turf if Chrysler has appointed new dealers to a “point” where laws are biased in favor of the new dealer, favoring a less competitive environment.
The arbitration ruling also notes that the dealers in question don’t have any right to seek financial compensation from Chrysler. If Chrysler appointed another dealer to serve their market area, then the old dealers have little recourse to seek any kind of financial compensation from Chrysler.