U.S. automaker Chrysler wants to eliminate 789 dealerships

Thursday, May 14, 2009

American automobile manufacturer Chrysler LLC has said that it wants to eliminate 789, or about a quarter, of its 3,200 dealers by early June. In a bankruptcy court filing on Thursday, the firm stated its network has too many dealers competing between each other and is antiquated.

A June 3 hearing has been scheduled in the US Bankruptcy Court to determine whether the move should be approved.

"This is a difficult day for us and not a day anybody can be prepared for," said Jim Press, the Vice Chairman of Chrysler.

Company executives said the firm is trying to eliminate dealers with poor performances, and retain those who make the strongest sales. Over 50% of the dealerships that are to be eliminated sell less than a hundred automobiles per year.

"We recognize in the short term we will see some loss of sales. But based on the long term ... the dealer [network] is key and it's going to be very strong, powerful, with a much better financial viability," said Press.

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Sources

Tom Krisher and Dan Strumph. "Chrysler moves to eliminate 789 of 3,200 dealers" — Associated Press, May 14, 2009
Christopher Scinta and Tiffany Kary. "Chrysler Asks Leave to Cancel 789 Dealer Agreements (Update1)" — Bloomberg L.P., May 14, 2009

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