Closing Chrysler Dealers Question HQ’s Decision
Chrysler dealerships all over the country that have been ordered to close ask their parent company to explain themselves. If you were going to lose your job in an economy that’s not so hot to begin with, wouldn’t you want to know why? And if you discovered that your higher-ups had the funds to keep your franchise afloat, you’d probably be really mad. Some of these CDJ dealers are, and they’re taking the case to court.
A group of activist dealers rejected in the Chrysler and General Motors bankruptcies is contemplating going back to Congress to seek justice after a federal audit questioned the criteria used to terminate dealers, as well as the automakers’ claims the moves were necessary to help restore profits.
The report issued today said GM failed to apply the criteria uniformly. It also said cost savings were not the reason for the dealership closings, even though GM and Chrysler told Congress the terminations would speed recovery from their 2009 bankruptcies.
The report found that Chrysler, which made decisions on a case-by-case basis, followed the criteria for targeting dealers for termination. But it criticized Chrysler for not providing dealers with an appeals process. GM, however, did not follow this criteria.
Chrysler said that same month it was offering new franchises to 50 dealers who applied for arbitration, in addition to 36 previous offers or new agreements. Chrysler terminated 789 dealers in June of 2009 and said in January that 409 had applied for arbitration.
Chrysler, in a statement today, continued to defend the terminations, calling it “rightsizing” the dealer network.
“This optimized dealer network is already contributing to improved vehicle sales for Chrysler and will be a vital part of the Company’s success as we continue to deliver outstanding products to our customers,” the statement said.
Rightsizing…hmm. Regardless of the outcome, w hope that Chrysler sticks to their plan of reopening their dealerships, maybe all of them one day.
Source: Automotive News
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