Chrysler LLC wants to eliminate
roughly a quarter of its 3,200 U.S. dealerships by early
next month, saying in a bankruptcy court filing Thursday
that the network is antiquated and has too many stores
competing with each other. |
The company, in
a motion filed with the U.S. Bankruptcy Court in New York,
said it wants to shed 789 dealerships by June 9. Many of the
dealers' sales are too low, the automaker said, with just
over 50 percent of dealers accounting for about 90 percent
of the company's U.S. sales.
Dealers were told Thursday morning through United Parcel
Service letters if they would remain or be eliminated. The
cuts are likely to devastate cities and towns across the
country as thousands of jobs are lost and taxes are not paid.
Chrysler Vice Chairman Jim Press called the cuts difficult
but necessary. He said the list of dealers is final and
there will be no appeal process.
"This is a difficult day for us and not a day anybody can be
prepared for," Press told reporters during a conference call.
A hearing is scheduled for June 3 in U.S. Bankruptcy Court
in New York for the judge to determine whether to approve
Chrysler's motion. Judges often rely on companies in
bankruptcy to help determine what is in their best business
interest, such as the closure of dealerships or cancellation
of contracts.
Chrysler executives said the company is trying to preserve
its best-performing dealers and eliminate ones with the
weakest sales. More than half of the dealerships being
eliminated sell less than 100 vehicles per year, they said,
and account for 14 percent of U.S. sales. |
