About 800 Dealers to be Rejected by Chrysler
Chrysler LLC is planning to reduce the number of dealer ships, according to a Chrysler spokesperson on Tuesday. On the very day, a lawyer has informed the dealers that almost 800 dealers will be rejected by Chrysler. This lawyer, Stephen Lerner who is the head of the bankruptcy and restructuring practice of the law firm Squire Sanders, told this information to the dealers via a conference call. As the call was confidential, the dealer who listened to it and leaked the info asked for secrecy.
According to the info, Chrysler will file a list of those dealers that it wishes to keep with the US Bankruptcy court. It had formerly received $4 billion in government loans, and on 30th April it filed for bankruptcy protection, asking a bankruptcy judge to endorse the sale of all Chrysler’s assets to a new and fresh Chrysler that will be controlled by Italy’s Fiat Group SpA. Another $6 billion has been promised by the US government to Chrysler in order to help it go through bankruptcy process.
Since the early last year, Chrysler has lost almost 400 dealers. Even then there are a lot of closely placed show rooms (franchises). It is a nice idea to merge these closely placed franchises together for giving ay to larger and well managed show rooms, which will be more profitable.
David Kelleher, who owns two Chrysler dealerships in the Philadelphia area, said, “This is craziness, you’re talking about 800 or 1,000 small-business owners being knocked out of business, I guess to serve the greater good.”