Chrysler Terminating PA Dealers; Let the Lawsuits Begin!

Robert Farago
by Robert Farago
chrysler terminating pa dealers let the lawsuits begin

Even as Chrysler unveils its brand new bailout bait (a.k.a. prototype electric vehicles), the ailing American automaker has finally unleashed its long-promised Holy War on “under-performing” dealers. Lawyer Richard N. Sox, Jr., Esq.’s column in Dealer Magazine reports that the Keystone State is Ground Zero in ChryCo’s campaign to shed stores. “Chrysler has finally pulled the trigger on sending out notices of termination. As of this writing, Chrysler has apparently sent 10 Pennsylvania dealers a notice that their franchises are being terminated. It is unclear why Pennsylvania appears to be the test market for these termination actions. We know from experience that Pennsylvania’s franchise protections are relatively strong compared with many other states. It may be that these dealers are particularly poor performers and thus the easiest termination cases to win.” Mr. Sox gets his Gox box socks on and sets about cleaning ChryCo’s clock (while we play the “Pennsylvania” drinking game). Suffice it to say, “Under federal and state price discrimination laws, the VPA program is illegal in a situation where the dealer MSR is inappropriately inflated such that the dealer can’t qualify for VPA incentive monies.” Or, more prosaically, “There is a strong claim for damages, which should certainly get Chrysler’s attention and give the dealer added leverage in fighting a termination action.”

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  • Akcarguy Akcarguy on Sep 23, 2008

    One problem with the reference to the VPA program, it was eliminated Jan. 1,2008. In the new program all dealers are paid at the retail delivery regardless of MSR attainment. With this kind of research he'll get blown out of a courtroom by Chrysler's lawyers.

  • Kendahl Kendahl on Sep 23, 2008

    Notwithstanding his other foolish utterances, Robert Lutz was dead on when he stated, a few years ago, that Detroit is bigger than its market. Too many plants, too many workers, too many dealers. (Too many retirees, also, but only time will fix that.) Because the pie has to be divided into so many pieces, none of them is big enough to survive on. Getting rid of the least productive dealers will give the others a better chance to succeed.

  • Mykeliam Mykeliam on Sep 24, 2008

    I wonder if they'll let the customers speak at the hearing?? What's that? They did the lost your keys scam? How's that work? Oh. The used car manager suddenly disappears with your keys when you decide to leave without buying a car, huh?? Well, your honor, would you like this dealership to represent your company?

  • Joeaverage Joeaverage on Sep 24, 2008

    And THAT folks is an example what smelling that new car smell can do to you... (plastic and paint fumes) Not serious - just digging for fun.