Chrysler Seeks to Cut 789 Dealers

Yesterday in the US, Ailing Chrysler LLC announced plans to cut 789 of its brand dealerships, while struggling General Motors is expected to cut more than 1,100 of its dealers by the end of next week. In a motion filed in US Bankruptcy Court in New York, Chrysler listed the dealers it wants to eliminate, claiming their sales were too low. While many of the dealers also offer other non-Chrysler brands, it is expected that some may take the issue to court.

Dealers were informed via letter – delivered by UPS – that they would lose their Chrysler, Dodge or Jeep brands. A bankruptcy court hearing is scheduled for June 3 to decide Chrysler’s motion to eliminate the dealers. Under bankrutpcy, a company is allowed to vacate contracts, such as car dealer franchise contracts.