Chrysler’s Genesis plan has swayed most arbitrators, report says

Article by Christian Andrei, on August 29, 2010

No clear pattern stands out in the arbitration rulings involving Chrysler Group and General Motors Co. So far, we can see that Chrysler's Genesis plan for consolidating all its brands in each dealership has gotten the nod from most arbitrators while GM's cost-cutting grounds for removing dealerships has had less success. Since late April, Chrysler has won 12 cases and lost four.

Rejected Chrysler stores are faced with a daunting challenge of standing their ground against the Genesis program and Chrysler's year-long strategy of awarding franchises that are located in the vicinity of these rejected dealerships.

Tammy Darvish, a rejected Chrysler dealer in Maryland who is a co-leader of the Committee to Restore Dealer Rights, said that arbitrators have given weight to the Genesis plan.

GM has lost the three publicly known cases. GM claims that it won some cases but it doesn't want to discuss them.

Dealer lawyer Richard Sox of Tallahassee, Fla., said that GM has been much more inconsistent with its business plan than Chrysler by reinstating a big percentage of the dealers rejected in bankruptcy. Sox added that as a result, the arbitrators tend to think that GM's business plan is less credible.

Topics: chrysler, plan

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