GM, Chrysler Agree To Reconsider Dealer Cull
Bowing to legislative pressure, GM and Chrysler have announced today that they will initiate reviews of the dealer cull undertaken during bankruptcy. GM is announcing a “Comprehensive Plan To Address Dealer Concerns,” while Chrysler characterizes its agreement as a “Binding Independent Review Process for Discontinued Dealers.” Both firms take pains to thank Senator Dick Durban and Rep Steny Hoyer for their leadership in preparing the non-legislative conclusion of months of bitter acrimony. Culled GM and Chrysler dealers, you know who to make your campaign donations to… unless you’re a member of the dissident group the Committee To Restore Dealer Rights. According to Automotive News [sub], the group says the new plans will only allow “between 39 and 51” culled GM dealers to be reinstated. “The GM proposal guarantees that they would win every arbitration,” says one member of the committee, who alleges that the new process is based on the same allegedly flawed data the initial cull was based on. Hit the jump for the plan outlines.
GM’s plan includes:
- A commitment to advise all Chevrolet, Buick, GMC and Cadillac dealerships that received a complete wind-down agreement of the criteria used by GM in the selection of that dealership for wind-down.
- A face-to-face review process for all complete wind-down dealers who have not already terminated their dealer sales and service agreements with GM.
- If the complete wind-down dealer is not satisfied with the outcome of the face-to-face review process, he or she may elect to proceed to binding arbitration. The arbitration will expressly be limited to whether GM selected the dealer to receive the wind-down agreement on the basis of its business criteria.
Additional components include:
- Accelerated wind-down payments to dealers consistent with the terms of their wind-down agreements.
- A process to resolve open issues identified by dealers related to the operation of wind-down dealers.
- Agreement to support public policy issues of mutual interest identified by dealers.
- Agreement to work with appropriate policy makers regarding floor-plan and other financing issues that are important to dealers.
- Additional evaluation in limited circumstances for complete wind-down dealers who purchased stock, land or dealerships from GM in the last four years.
- Reaffirmation of GM’s long-standing commitment to try to increase the diversity of its dealer body.
- In the limited circumstances where there are dealer re-establishments, area wind-down dealers will be given the opportunity to submit a proposal.
- Market reevaluation to ensure GM has sufficient dealer representation across the country.
- Placement assistance for service technicians and other dealership employees.
Chrysler’s plan includes:
- Transparency on Chrysler’s initial dealer determinations through face-to-face meetings with Chrysler executives
- A binding review of those determinations by an independent 3-person panel
- An opportunity to join the new dealer network if that independent review panel rules in the discontinued dealer’s favor
The fundamental elements of the appeal process include the following:
- Provide each discontinued dealer the general criteria and standards used by the former Chrysler LLC in making its rejection decisions and the specific criteria considered and applied to the individual discontinued dealer’s circumstances
- Offer of a meeting with the discontinued dealer’s former Business Center to discuss the criteria, and ability for the dealer to present information to refute the rejection decision
- Right to call for a binding independent review if dealer believes its rejection was not warranted. Chrysler will abide by the decision of the independent review panel
- Two opportunities to join the new dealer network if the panel rules in the discontinued dealer’s favor: first, to join the new network as a Genesis (Chrysler, Jeep® and Dodge) dealer in the previous market area or, if that is not possible, to be offered an opportunity to open a Genesis dealership in another market area from a list of available market areas
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