Chrysler might not follow GM on dealer reinstatement

Article by Christian Andrei, on August 26, 2010

In response to General Motors Co.'s intention to reinstate 661 rejected dealerships, Chrysler Group said that it will not be following suit. Chrysler also said that the number of arbitration claims involving its former dealers has dropped by 5%.

In an e-mail yesterday to Automotive News, Chrysler said that the arbitrations will make the decisions regarding dealer appointments.

Chrysler also revealed that as of late January, 418 of the 789 closed Chrysler dealerships had paid $1,625 each to give notice of their intent to arbitrate.

But since then, several dealerships have decided not to proceed with it. The total number has now fallen to below 400. Last Friday, GM had announced plans to reinstate 661 of the 1,160 dealerships that had submitted arbitration claims.

There were 2,000 being targeted to lose one or more franchises by October. When asked if reinstatements are possible at Chrysler, a source had pointed out the difference.

He said that while GM's rejected dealers are still in business and still have contracts to sell cars, Chrysler dealers don't. The source added that if there was never any contract in the first place, it can't be legally reinstated. [via autonews]

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