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  #1  
Old 10-02-2009, 07:48 AM
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Default Chrysler makes concession to terminated dealers

Chrysler makes concession to terminated dealers

October 1st, 2009 by Bill Cawthon
Facing possible legislation restoring the franchises of 789 dealers cut by Chrysler during its brief stay in bankruptcy, the automaker has agreed to stop offering the terminated dealers’ former territories to new dealers. The company says the action will continue throughout the negotiations it is having with dealer representatives and the National Automobile Dealers Association.

Chrysler’s practice, which it had stepped up recently, created a lot of ill will among the former dealers, who believe they should be offered the right of first refusal if the company wants to expand into the areas they once served. It also raised some eyebrows on Capitol Hill.

Legislation restoring the franchises passed the House, but got stalled in the Senate. Dealers can drum up a lot of support among legislators because they are not only constituents, they are often generous supporters of favored candidates.
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Old 10-02-2009, 09:31 AM
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They should offer to the guys they shut down , the ability to get started up again . I too would be upset with what their doing . Kinda makes it look like they purposely wanted to shut down certain dealers .
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Old 10-02-2009, 10:02 AM
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I know it's not exactely the same, but I thought it was legislation that if a company lays off people (not downsizing mind you), they have to offer to hire them back before they can hire new people. Shouldn't that policy umbrella this situation as well?
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Old 10-02-2009, 12:05 PM
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I get what you're saying, but they should not be allowed to keep those dealers. The supreme court ruled that if a new company takes over, they do not have to keep employees.
These dealers were told almost 10 years ago that they needed to become Alpha dealers. Which means that they needed to have Chrysler/Dodge/Jeep at one location. Most of them did not do that, along with bad customer satisfaction ratings, low dealer sales, and customer lawsuits - these dealers lost their franchises. I would have been done alot quicker if it were a different type of franchise, and they did not meet the franchises criteria - like a Napa/Car Quest/ or Jiffy Lube. The one thing that Chrysler did that was totally wrong was to not spread out the territory's for the dealers. By me, there was a dealer every 15 minutes away. The saturated the territory's with too many dealers, which cut down on the dealers ability to have volume and profits.
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Old 10-02-2009, 06:52 PM
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1970 Charger hit the nail on the head.........
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Old 10-02-2009, 07:14 PM
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Ah, see i didn't know they were primarily one brand dealers, it seems all our dealerships out in Alberta are the 'Alpha' type so I hadn't thought about that. And fair enough from chrysler's point if that's how they based it. And as for multiple dealerships, I have 3 within 20 minutes of myself and we have a total of 6 in a city of 1 million plus 3 just outside the city in bedroom communities.
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Old 10-02-2009, 09:19 PM
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They shut them down for a reason (or two or three) and in a consolidated marketplace, the dealers who were shut down or lost their franchise won't be able to just pick up where they left off.

I suspect that Chrysler will require any new or re-established dealership to carry all Dodge/Chrysler/Jeep lines as one major condition to re-establishment or a new franchise.

Further, there may be some disincentive for not meeting certain sales targets within their area, such as less holdback payment amounts or a % increase in dealer acquisition and franchise costs.

It will be interesting to see how this plays out.
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Old 10-02-2009, 10:32 PM
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Hmmm, this is interesting, though I agree with Tom on this one, the ones shut down should be the first to get theirs back (provided they aren't t'd off so much for having had it stuck to them with a lot full of vehicles and parts inventories, which, by the way, Chrysler insisted on them buying, that they couldn't sell), and provided they also meet the requirements for a franchise. On the flip side, too, though, a franchise, as with any other business, it sometimes is all about location, location, location, and if you don't have the right product for the market you are trying to sell to, then bye bye birdie.

I don't live in a very big city, so there isn't a dealership on every corner, like Baton Rouge, for example, but now, on the western end of my parish, there is no Chrysler/Jeep/Dodge dealer anymore

I understand it from the standpoint of streamlining, but hopefully when they re-ermerge from all this, they will have "streamlined" the bloated and top-heavy parts of the company in order to be leaner and generally more competitive.

- Cajun
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Old 10-03-2009, 07:50 AM
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Quote:
Originally Posted by CajunDodge View Post
Hmmm, this is interesting, though I agree with Tom on this one, the ones shut down should be the first to get theirs back (provided they aren't t'd off so much for having had it stuck to them with a lot full of vehicles and parts inventories, which, by the way, Chrysler insisted on them buying, that they couldn't sell), and provided they also meet the requirements for a franchise. On the flip side, too, though, a franchise, as with any other business, it sometimes is all about location, location, location, and if you don't have the right product for the market you are trying to sell to, then bye bye birdie.

I don't live in a very big city, so there isn't a dealership on every corner, like Baton Rouge, for example, but now, on the western end of my parish, there is no Chrysler/Jeep/Dodge dealer anymore

I understand it from the standpoint of streamlining, but hopefully when they re-ermerge from all this, they will have "streamlined" the bloated and top-heavy parts of the company in order to be leaner and generally more competitive.

- Cajun
One thing these dealers did not tell everyone is that Chrysler sold their complete stock of vehicles for them, they did not lose anything in terms of having to eat the vehicles. Then Chrysler sold the cars for $300.00 each to other dealers for administration fees and shipping costs. You had to buy the vehicles in lots, not one at a time.

Chrysler had the right idea 10 years ago by starting to eliminate vehicles that competed within the Chrysler family. That is what killed GM. They had a vehicle in each line competing within itself. Look at the minivans -Chevy had one, Pontiac, Oldsmobile, Saturn. Then look at the SUV's, Chevy, GMC, and Oldsmobile had the same vehicle with a different name and grille.
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