• Jan 3, 2010
So you're Chrysler, and you hop into the Chapter 11 pool to save your own skin. While you can wash away some of your past sins with a bankruptcy-protection filing, the deal with Chapter 11 is that you've got to come up with a way to get out of your financial pickle and return to profitability. Part of the Chrysler plan to keep its head above water was divestiture of 789 dealers, a very unpopular idea with the rejected sales organizations (and no small number of politicians, whose ears were subsequently bent by the affected dealers).
When adversity strikes, what else is there to do but unleash legislative changes and legal challenges to and fro like archers' arrows? Recent alterations to dealer laws in Oregon, Maine, North Carolina and Illinois contradict bankruptcy code and are unconstitutional. The new laws allow the states to block Chryser from granting a new franchise or relocating an existing dealership into a market once belonging to a rejected dealer.

In response, Chrysler has fired off a lawsuit in Manhattan bankruptcy court naming eight parties as defendants, including the Oregon Attorney General, secretaries of state in Maine and Illinois, and other transportation officials. The filing argues that the laws being contested would force Chrysler to give consideration to the dealers for rights that they do not have, and furthermore, the dealer rejections were approved as part of the sale to Fiat.

[Source: The Detroit News]


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  • 48 Comments
      ritat
      • 5 Years Ago
      I wouldn't buy a Chrysler even if you paid me to. Why?? Because they continually put lousy transmissions in their vehicles then refuse to do anything about it. We bought a Plymouth caravan and after having it for 3years, one day, the transmission, without warning took a crap. Did they offer to replace the transmission? Of course not. Their excuse, was the warranty was up. A few years we decided to buy a Chrysler (can't remember the model) but it did the same thing. Now I know why my dad always told me not to buy American Motors. Now I stick strictly with GMAC - Chevrolet, Pontiac, etc. They last a long time. We have a 2000 Silverado 1/2 ton with 150,000 miles on it with the original transmission and a 1994 Cavalier with almost 200,000 miles. Original transmission.
      • 5 Years Ago
      Thank you very much Chrysler, take our money and now kick the taxpayer in the groin. Is there no end to the treachery of Chrysler?
      • 5 Years Ago
      While I wish I could agree with Caddy-V, I actually had that very experience over the phone with a GMC dealer. Now, a couple of conditions: 1) It was the Costco price on their vehicle, 2) I described in detail the condition of my trade (and our deal was "subject to" the trade being acceptable), and 3) I bought out of town. I checked the pricing locally and they were $1700 better than the low cost dealer in my area. I expected the dealership to squeeze me a bit once I drove 3 hours to get there, but I guess they understood that I was not going to drive 6 hours to do what I could do here, and maybe they also value the Costco relationship. We also have Sam's and they get great pricing without ANY hassle. Best way to buy a car. You are not likely to get a better deal and if you do, it will not be as easy as saying "I am a Costco member and I would like the Costco price on whatever."

      If you hate car buying as much as me, give this a whirl. Both programs seem to do very well.
      • 5 Years Ago
      During the 1950's when the big three had a near monopoly in the market, having a large dealer network made sense. But not today considering how their market share has reduced.
      • 5 Years Ago
      More dealers means better prices for consumers, however according to the latest data average Dodge dealer sells 14 new cars a month, Chrysler sells 5 new cars a month, compare that to 23 for Mazda, 30 for Chevy, 108 for Toyota. It seems like they need to cut a few dealers.

      First and foremost issue is the product, that is one of the reasons Chrysler does not sell well and needs to remove dealers. I'll give you a great example, no Chevy dealer would commit to me over the phone for a $200 discount on a Camaro, Dodge dealer offered $2,100 from the get go. Chevy has 41 days supply of Camaros which is great, Dodge has 95 days supply of Challengers which is not good. The issue is that either Dodge over produces cars, forces dealers to buy who have to sell at discount and make tiny margins and are ready to beat out any local Dodge dealer just to make any money. Or the product is poor, so people are simply not willing to pay full price for it.

      Any way you look at it is is a product issue. If Chrysler made more popular cars that people really wanted, number of dealerships would not be an issue. What they need is better interiors and better MPGs.
        • 5 Years Ago
        Sea Urine, First off, this has been discussed before. How could one be so stupid as to try to make some sort of deal for a car over the phone? Enter Sea Urchin.
        How could someone be so stupid as to think that:
        A. I can get the dealers best price over the phone
        B. the dealer is going to give you the best price over the phone without a credit app. or no way of knowing wether the moron on the other end of the phone is just blowing smoke,
        c. The dealer knows nothing about the trade or what shape it's really in
        d. The dealer does'nt know if maybe the caller is from another dealer pulling a fast one
        e. The dealer does'nt know it the caller might just be some stupid little kid playing a practical joke
        Bottom line is you did'nt go there in person letting them know that you are a serious buyer and show him that you have the means to buy in the first place.Here's something you posted recently.

        "Dec 29th 2009 6:15PM There's by the way a GREAT reason for why these companies are where they are. I called today a dealership to find out the price of a Dodge Challenger, it costs $26,425 on their website and the guy would not even give me the price over the phone unless i came in into the dealership (i told him i live far away from him). After talking for like 10 minutes he says BEST he can do is 1K off MSRP."

        That was your statement on a similar topic. So which is it 1K or $2100 from the get go?
        How some people can use a keyboard and breath at the same time baffles me.
        • 5 Years Ago
        Just one question. Are you seriously considering a Challenger or doing this for personal research?
        • 5 Years Ago
        Why don't you idiots who think that sites like Edmunds and KBB sell vehicle go buy them from them? That's because they don't sell them. They are merely advertising webistes for sheep like you who can't think for yourself. Unfortunately the CONSUMER created this negotiating process that nobody likes in the car industry. How much whining would you do if everone paid the same price no matter where you decide to purchase a vehicle? You would cry over your rate because you were too lazy to get your own financing and cry some more when you couldn't get FAIR MARKET VALUE on your trade because you didn't want to put in the effort to sell it yourself.
        • 5 Years Ago
        I am considering a Challenger, but the one i want is SE with a Costumer Preferred package, which brings it to $26,200, it is out of my range, i would be comfortable with 20K-21K. This is why i keep calling Dodge dealers and Camaro dealers, i want one of those cars and i want to know if i can get them in my price range. I think once 2011 Mustang comeout Dodge and Chevy dealers will change their tune in a hurry, on paper their cars are too weak.
        p sutton
        • 5 Years Ago
        Why hasn't anyone asked how many cars are sold to Korea and Japan.? They would be shocked
        • 5 Years Ago
        I'm a little with the Urchin on this one in that face-to-face bargaining isn't necessary.

        With Edmunds and many other resources to tell what you should be paying, and what inventory is available, pinning your hopes on your bargaining skills at a single dealership is a waste of time. If you're going to a dealer, do a test drive and get a business card, then bail out and contact them later. Nothing good comes from letting salespeople think you want to buy a car today...

        I could have(and have had) several offers from area dealerships (within a hundred or so miles) after a slew of emails that would take less time than a drive to a dealer. Only then might I go back local to give them the chance to match, as I'd definitely be using the dealership for service even if they decide they don't want to match prices.

        • 5 Years Ago
        No what they need to do as well as every other company is to make cars that are affordable , You don't need power windows in every car , you don't need AC in every car They need to go back to where are these types of standards are options again . Every time they put a standard feature that used to be an option adds to the cost of the car . Not to mention the cost of keeping up with the damn EPA standards and every differn't state regulation that get shoved there way!
      • 5 Years Ago
      They closed 700+ dealers and now they want new ones? SCREW OFF FIAT! Serves them right.

      --RS
        • 5 Years Ago

        Take a deep breath. Count to ten. Good.

        Chrysler Group should have the flexibility to award a franchise, such as Dodge, to an existing Chrysler Jeep dealer in an area where a Dodge-only dealer was rejected to further the goal of the Genesis project to have all Chrysler Group brands carried by a dealer.
      • 5 Years Ago
      Buy a car over the phone? Sounds real dumb.
      • 5 Years Ago
      Of course Chrysler is going to sue. The whole fokking company is owned by the UAW and run by boardmember and Obama Car Czar, the ultra-liberal Ron Bloom. As God is my witness, I will NEVER buy a Chrysler or Dodge product. Papa Oscar Sierra
      • 5 Years Ago
      I know of one Jeep/Chrysler dealer that always seemed to do well that was killed off by Chrysler. It was thought that it was because long ago they sued Chrysler and were given the corporate FU during the dealer cuts. They went to petition the government in response. I say don't bite the hand that feeds you and they have a right to align the dealerships as they wish. They need to evenly spread them out or they will all fail.
      • 5 Years Ago
      They should sue Bush too, because he was the one that caused Chrysler to go into bankruptcy in the first place.
      • 5 Years Ago
      screw any car over 10,000 dollars. no car is worth anymore than that.
      • 5 Years Ago
      "You can simply buy a car from a company that supports American jobs and is not taking taxpayers money, Honda, Hyundai, Toyota."

      Yes because they have already been subsidized by their own government who recognized the importance of maintaining their industry. And that 'supporting American jobs' thing only goes so far with them. It's about CONTENT and the real supporters of American jobs through American content is General Motors, Ford and Chrysler, in that order. Not to mention the fact that supporting foreign corporations supports their foreign interest rather than our own. There are plenty of holes in your statement.
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