Dealers, Lawmakers Bash Chrysler For Opening New Stores Near Culled Dealerships

Edward Niedermeyer
by Edward Niedermeyer
dealers lawmakers bash chrysler for opening new stores near culled dealerships

Chrysler’s troubled relations with its dealers took another turn for the nasty this week, as culled dealers teamed up with lawmakers to criticize Chrysler’s decision to open new dealerships near the sites of several culled dealers. As with GM’s dealer struggles, this latest controversy centers around Colorado, where culled dealers are protesting Chrysler’s behavior in the Denver Post. Culled dealers have seen franchises in their former areas awarded to chains like AutoNation before congressionally-mandated arbitration had even given them the opportunity to contest their culling during last year’s bankruptcy proceedings. “This is not right,” said one dealer. “We specifically asked (Chrysler) not to redistribute the franchise before our arbitration.”

And the fight over dealer redistribution has spilled over into the national arena, as several Republican lawmakers have written to Chrysler, requesting that it stop reassigning franchises until after arbitration is completed. Automotive News [sub] reports that Reps. Pete Hoekstra of Michigan and Steven LaTourette of Ohio have written Chrysler to express their displeasure with the automaker’s shafting of their dealer constituents. In a letter to Chrysler, the representatives argue:

We are concerned about your treatment of the loyal Chrysler dealerships that have stood by your brand for decades. Dealerships deserve a good-faith effort entering the arbitration process

Chrysler plans on opening as many as 100 new dealerships after having culled some 789 during its bankruptcy last year. Why the firm expected to be able to screw its dealers after taking a taxpayer bailout and not face stiff political opposition is difficult to explain.
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  • GS650G GS650G on Mar 05, 2010

    Anyone who has every gotten shafted on a trade, been screwed by the service department, argued for hours about overpriced floor mats and pinstripes that were unneeded or unwanted, or dealt with finance people who lie for a living will have a very hard time sympathizing with the culled dealers. And any company that does this doesn't warrant our business and should be avoided. These operations need to go away. Companies should sell cars on line and do service through retail repair shops. There are plenty qualified to fix cars, sometimes without inflating the bill beyond what is covered under warranty. It's time to move car sales into the 21st century.

    • Mtymsi Mtymsi on Mar 05, 2010

      Two of the more notable problems with moving to an online sales model are the inability to appraise a trade online (you can estimate the value but the appraiser still has to physically see and a lot of times drive the trade in) and the inability to testdrive vehicles and see the color selection on the actual vehicle. All dealerships today have internet sales depts. but the buyer still has to go to the dealership for those above things. You can select the vehicle, negotiate the pricing and arrange the financing online but even if there is no trade in you still have to go somewhere to pick it up. Lastly, without dealerships where would the buyer go to pick up their new vehicle?

  • Dynamic88 Dynamic88 on Mar 05, 2010
    Why the firm expected to be able to screw its dealers after taking a taxpayer bailout and not face stiff political opposition is difficult to explain. Actually what's hard to understand is why Chrysler has to go through an arbitration process when a BK judge has already told them they could drop these scum-sucking dirt-bags, - er, dealers. The cull should have been much deeper/bigger. The mystery is why they are opening 100 new dealers.

  • Crush157 Crush157 on Mar 05, 2010

    So here in suburban Chicago, St. Charles, they culled the local Chrysler/Jeep/Dodge dealer (Richard Chrysler) then 2 months later gave the Chrysler dealership to what was a Cadillac dealer (Al Piemonte Cadillac) 1 block west. The caddy dealer wasn't doing well either in our town.

  • Nrd515 Nrd515 on Mar 09, 2010

    It seems like some of the culled dealerships, not any in my area were mostly "problem" dealers, or they had very poor facilities. I would, and have bought cars from tiny small town dealers with showrooms that held one or two cars, and from places with a couple dozen cars in the showrooms and hundreds out it in the lot, and I would take the small place hands down. The finance weasels in a couple of these places were so obnoxious, we threatened to walk out a couple of times (And I did once) if they weren't replaced with someone else. Chrysler did cull one of these places that sold Jeeps, and I was happy to see it happen, as I had a couple of terrible buying experiences there over the years. Chevy culled their franchize too, and then Pontiac was put down. Now they lost their Hundai one too! All they have left is VW, GMC, and Volvo. Hopefully, 2010 will be their last year. They need to disappear. Chrysler gave the Jeep franchise to the local Dodge dealer, and they got Chrysler when they closed up the other really slimy dealership here locally. A friend of mine who recently died used to buy his cars from a very small Dodge dealership that used to be owned by a relative of his. One car showroom, and 3 service bays. I think six people total worked there. I bought one vehicle there and was very pleased, but they were just too far away to go to for regular service, let alone when there was an out of warranty issue. The next time I went to one of the local ones, where I have bought 3 previous vehicles. I've never had a problem with them, except for their service pricing, but that's an industry wide problem, so I can't hold that against them.