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Oracle of Delphi

Chrysler threat riles dealers

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Automotive News - Chrysler group dealers and their lawyers are girding for a fight over the company's threat to yank the franchises of 173 dealerships because of poor sales.

A letter this month by J.W. Dimond, Chrysler's national dealer placement manager, said dealers could lose their franchises if they do not meet their "minimum sales responsibility" within 180 days.

Most state franchise laws require automakers to give dealers 180 days to correct performance issues before franchises can be terminated.

The minimum sales responsibility is a monthly sales target that Chrysler sets for each dealership. Chrysler uses several factors, such as area population and the proximity of other dealerships, to calculate a dealership's sales goal.

Many dealers say those targets often are arbitrary and ignore local market conditions. Leo Jerome, a Chrysler-Jeep dealer in Lansing, Mich., said Chrysler doesn't fairly measure his market, which includes two General Motors assembly plants.

Most vehicle sales in the market are to GM employees, and "Chrysler doesn't take that as a factor," Jerome says.

"There is an overabundance of Chevrolet dealers for the size of the community, Jerome says. "The manufacturer has to come out of its ivory tower and pay attention to what happens in the market."

Cerberus not involved

The termination letters affect more than 4 percent of Chrysler's 3,700 U.S. dealerships. Chrysler seeks to reduce its retail network, largely by consolidating Chrysler, Jeep and Dodge franchises under the same dealership roof.

Article Continues: http://chryslercorporationllc.blogspot.com...es-dealers.html

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But part of those poor sales can be attributed to the craptacular product out there. Which is of no fault of the dealers'.

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It's like an underachieving professional sports team with sucky players that fires the coach. :P

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