Chrysler wants more dealers open on Sundays for service

Chrysler Group LLC, after increasing the number of dealerships that operate on Saturdays, plans to push more of its independent franchises to offer maintenance services on Sundays to better compete against service stations.Chrysler wants more dealers open on Sundays for service

Chrysler invites dealers to open Fiat dealerships

Chrysler Group LLC is inviting around 600 of its dealers to Detroit on Aug. 30 to learn more about the Fiat brand and decide whether they want to sell Fiats in the U.S.

Italian automaker Fiat, which owns 20 percent of Chrysler and has managed the automaker since it exited bankruptcy protection last year, is planning to bring the Fiat 500 small car to the U.S. later this year. It expects to have around 200 U.S. dealers....More

Chrysler to discuss Fiat strategy with dealers

Chrysler Group LLC has invited 600 dealers, including all those in Metro Detroit, to a meeting in Auburn Hills Aug. 30 to learn what they need to do to sell the Fiat brand.---...More

GMAC: Most Chrysler dealers to qualify for new loans

Company says most of Chrysler's 2,400 retailers will get needed financing

GMAC Financial Services President Bill Muir said Sunday that the number of Chrysler dealers expected to close because they don't qualify for new loans through the lender is likely to be small.

GMAC was designated the new finance company for Chrysler Group LLC dealers after the automaker filed for bankruptcy.

The Detroit News reported Saturday that some dealers said they had been told by GMAC and Chrysler officials that hundreds of dealers were at risk of not being able to finance with GMAC.....More

GMAC: Most Chrysler dealers to qualify for new loans

GMAC Financial Services President Bill Muir said Sunday that the number of Chrysler dealers expected to close because they dont qualify for new loans through the lender is likely to be small----...More

Chrysler to start leasing; dealers await sales boost

The Chrysler Group said Wednesday that it will start leasing again, a move that dealers hailed as holding the potential to improve sales.
Through August, Chrysler's U.S. sales are down 39% compared with a year ago. At the Frankfurt auto show Wednesday, Fiat and Chrysler CEO Sergio Marchionne warned of a further decline. "We are going to see harsh reality in September, it is going to drop," he told the Associated Press....More

Dealers Fight Chrysler Franchise Cuts in Court

NEW YORK, June 4 -- Eldon Palmer was preparing for a grand opening of his upgraded Chrysler dealership -- a $3.2 million project he pursued at the automaker's urging -- when the letter came.

In formal language that seemed to belie their 52-year business relationship, Chrysler informed Palmer that his Indiana dealership, along with another he runs, would be among the 789 dropped as the automaker seeks to emerge from bankruptcy as a new leaner, healthier company.

"We were ready to roll," said Palmer, recounting the millions he has spent over the past two years expanding his Chrysler brands and putting them under one roof in a new facility. He had done so, Palmer added, at the request of Chrysler, which was trying to establish a more efficient dealership network.

One after another, Chrysler dealers slated for closure took the witness stand Thursday in a federal bankruptcy courthouse in Lower Manhattan. Some openly wept.

Chrysler, which plans to emerge from bankruptcy as a new company led by Italian automaker Fiat, is seeking court approval to terminate agreements with roughly a quarter of its dealerships. Thursday's hearing is to be followed by oral arguments Tuesday, after which U.S. Bankruptcy Judge Arthur J. Gonzalez will rule.

Chrysler executives have said that whittling down a bloated dealer network was necessary to be more competitive with foreign manufacturers. The executives said the company used business criteria such as sales productivity and customer service satisfaction to determine which dealers to cut. Chrysler also wants to bring its three product lines -- Chrysler, Dodge and Jeep -- under one dealership roof.

During cross-examination by a Chrysler attorney, Palmer acknowledged that his dealership met a mere 37 percent of its sales target for 2008. "It was embarrassing," Palmer said, in part blaming the poor showing on the condition of the building he purchased, which he has since renovated. "It is a beautiful facility now.

Larry Crain, a dealer in Little Rock, told a similar story, saying he invested in expanding his product offering at the encouragement of Chrysler. And like many others, Robert Melvin, a Nevada dealer, testified that he bought more cars from the company in recent months at the request of executives as Chrysler, faced with plunging sales, tottered on the brink of bankruptcy with insufficient cash flow.

He received a rejection letter last month. To his dismay, Melvin added, he received a shipment of more cars from Chrysler last week.

Despite the dealers' pleas, bankruptcy experts said the dealers have an uphill legal battle. In bankruptcy proceedings, companies have more leverage to ignore state franchise laws that protect dealers. And even if the dealers succeed in preserving their dealership agreements, the nature of the Chrysler case complicates the dealers' battle.

Chrysler is seeking to sell most of its assets to a new company led by Fiat, but the dealer contracts are with the "old" Chrysler that is being liquidated.

"It's a long shot," said Scott Van Meter, managing director of LECG, a consulting firm.

Furthermore, in an opinion approving the sale this week, Judge Gonzalez noted that the underlying argument of many opposing the transaction is the desire to have the government protect every stakeholder from economic loss -- not just those that the government perceives as being essential to the survival of a successful new Chrysler.

"For example, any dealership rejection that is approved will cause hardship to the particular dealership involved but may well be necessary if New Chrysler is to survive," Gonzalez wrote.