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North Carolina drops bid to protect rejected Chrysler dealers

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North Carolina drops bid to protect rejected Chrysler dealers



The state of North Carolina has agreed to drop legislation that would have allowed 13 rejected Chrysler dealers in the state to block the reassignment of their franchises to other dealers.

“The actions to reduce Chrysler’s dealer network were a necessary part of Chrysler Group’s viability and central to the interim financing and partnership with Fiat.,” the company said in a statement.

Chrysler rejected 789 dealers, including 10 in metro Detroit, as part of its government-backed bankruptcy restructuring last June. Prior to bankruptcy, Chrysler had pushed to consolidate Dodge dealerships with Chrysler-Jeep showrooms to improve the ability of surviving dealers to be profitable.

The agreement with North Carolina, which was approved by U.S. Bankruptcy Judge Arthur Gonzalez, was separate from a series of arbitrations filed by rejected dealers in January seeking to overturn Chrysler’s and General Motors’ decisions to terminate their franchises.

Since then, 36 rejected dealers have been offered new locations and last month Chrysler sent letters offering another 50 terminated dealers the chance to rejoin the Chrysler retail network.

More than 300 terminated Chrysler dealers who have not received those letters are still seeking through arbitration to overturn the company's decision to take their businesses.



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