The consequences of the Obama Administration's hope for New Chrysler to emerge from bankruptcy as quickly as possible will be felt by the 789 dealerships being shut down by the automaker on June 9th. According to a statement filed by Stephen Lerner, an attorney representing the Committee of Chrysler Affected Dealers:
"Chrysler's proposed asset sale and request for immediate termination of the dealer franchises will destroy several hundred independent businesses, ruin the livelihoods of their owners, cause the loss of thousands of jobs and precipitate inevitable personal and business bankruptcies."There's probably a lot of truth in that statement. As Ford Veep Jim Farley said, "You don't orphan four million customers overnight without some fallout." Still, none of this changes the fact that Chrysler needs to shed a large portion of its network of dealerships to ensure viability moving forward.
Says bankruptcy attorney at Mintz Levin, "The beauty of Chapter 11 is that you can accomplish these things that would be very difficult outside of Chapter 11." Somehow, we'd guess "beauty" isn't the word Chrysler's affected dealers would use, and we're interested to see how it all plays out in court.
[Source: Automotive News - Sub. Req.]