McClatchy/Tribune News | Chrysler is offering to reinstate some
of its 789 terminated dealers, reversing its hard-line policy in the
face of a slow and costly arbitration process that could distracted the
company from its turnaround plan.

One source familiar with the lobbying efforts of the rejected dealers
said he had heard that 86 to 96 could be reinstated.

“We have not sent any letters as of this morning,” Chrysler spokeswoman Kathy Graham said Thursday.

Slightly fewer than 400 terminated Chrysler, Jeep and Dodge dealers notified the American Arbitration Association they planned to pursue binding arbitration, authorized in legislation that Congress passed and President Barack Obama signed last December.

“I’ve heard the arbitration process has been far more frustrating both for the terminated dealers and the companies than anyone expected,” said Chuck Eddy, a Youngstown, Ohio, dealer who leads the Chrysler dealer council. His dealership was not terminated.

General Motors has sent letters of intent to 661 of 1,160 dealers it planned to wind down. Those who want to save their dealerships have 60 days to show they have sufficient financing and can meet other criteria to continue selling GM vehicles indefinitely.

Until now, Chrysler had planned to defend its decision to get rid of 25 percent of its dealers because its smaller share of the U.S. new car market — 8.9 percent in 2009 versus 11 percent in 2008 — simply can’t support 3,000 dealers profitably.

Tammy Darvish, a Maryland dealer and a co-leader of the Committee to Restore Dealer Rights, said she had heard from about 12 Chrysler dealers who said Chrysler officials contacted them and told them they would be receiving letters of intent for possible reinstatement.

“It’s very fluid and changes hourly,” Darvish said. “They (Chrysler) are scrambling. I think they never really accepted that they were going to have to go to all of these arbitrations.”