I just didn’t have it in me yesterday to tune into the Chrysler LLC conference call which followed the company’s dealership cut announcement earlier that morning. I followed some of the action on Twitter and then looked around locally to see who got whacked in the Raleigh, NC area where I live.
Turns out that at least 25 dealerships in the two Carolinas got hit, including Southern States Dodge in Raleigh, Johnson Chrysler-Dodge-Jeep in Durham, Goldsboro Chrysler-Dodge-Jeep and Williamson Motors in Clinton according to WRAL.com. I can’t say that any of thee surprised me, given that I pretty much know which dealerships near me seem to have the size to survive. Still, I am sure that it was a shock to dealership employees and owners that Chrysler LLC would be giving them the heave-ho.
One Quarter Of All Dealerships Must Close
All told, some 789 dealers will be shut down by Chrysler no later than June 9th, removing 25% of its total. Operating under federal bankruptcy protection, Chrysler is allowing dealers to appeal although for the lowest volume dealerships a stay of execution seems unlikely.
Yesterday morning, Chrysler filed paperwork with the U.S. Bankruptcy Court seeking to reject certain U.S. dealer agreements, and a list of U.S. dealer agreements to be assigned to the buyer of its business assets. Those dealerships who pass muster will become part of Chrysler’s pending alliance with Fiat once the sale is complete.
In response to the pending closure and loss of jobs, Chrysler shared the following announcement:
“We are in the process of revitalizing Chrysler’s business to succeed as a viable enterprise under new ownership in the future,” said Jim Press, Vice Chairman and President. “The unprecedented decline in the industry has had a significant impact on our sales and forced us to reduce production levels to better match the needs of the market. With the downsizing of operations after the sale and reduction of plants and production, similar reductions must be made to the size of the dealer body. We appreciate the support of our dealers and regret this painful action. We wish market conditions made it possible to keep everyone.”
Company Sets Up A Special Website
To help shepherd Chrysler through bankruptcy, the company has set up a special website, ChryslerRestructuring.com, to disseminate information about the changes coming forth. On that site visitors can pull up key documents, review filed claims & schedules and see other details related to the bankruptcy filing.
Source: Chrysler LLC
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