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Chrysler Will Shed 25 Percent of its Dealers

By on December 8, 2010 2:45 PM
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Chrysler has officially notified 789 of its current dealers, roughly one quarter of the total body, that effective June 9, their services will no longer be required. The dealerships involved, which account for less than 15 percent of the company's annual volume, can continue selling and servicing Chrysler/Dodge/Jeep vehicles for the next 23 days -- as well as have a court review their individual cases during that period. However, after June 9 all such activities and all direct assistance, including incentives and warranty payouts from Chrysler LLC, will cease, pending any subsequent change in plans. Today's decision, which is expected to impact close to 38,000 employees, will leave the post-bankruptcy Chrysler/Fiat with 2,392 dealers, of which 80 percent will handle all three Chrysler brands. Currently, 62 percent of its dealers have consolidated into that position as part of the firm's ongoing Project Genesis. According to a memo sent to the various principals, Chrysler will not buy back any vehicles in inventory nor parts or tooling. However, it plans to help pair each impacted outlet with another active local dealer to facilitate the transfer/liquidation of those items.
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