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Chrysler to Eliminate One-Quarter of U.S. Dealers

05/14/2009
Chrysler LLC has notified approximately one-quarter of its U.S. dealers that it is revoking the dealers' franchises by June 9. The company has also filed a list of the 789 eliminated dealers -- out of 3,200 total dealers -- with the bankruptcy court as part of its bankruptcy filing. The dealers are eligible to petition the court to remain with the company. The rejected dealerships were chosen based on low sales; the Detroit Free Press reports that paperwork in Chrysler's bankruptcy filing indicates that just over 50 percent of the company's dealers account for 90 percent of sales. The closings are scattered throughout the United States; news outlets in Pennsylvania, Texas, Ohio, and Michigan report closures in their states of 53, 50, 47, and 40 dealers, respectively. Bloomberg News says that most of the closures will be in the suburbs of major U.S. cities, with the largest employing up to 100 people. Dealers have until May 26 to file their appeals with the court. General Motors is expected to announce tomorrow that it will close 1,000 to 1,200 dealers.

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