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Chrysler rewards dealers' results

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Chrysler rewards dealers' results

Move comes amid arbitration to restore some franchises

Alisa Priddle and Robert Snell / The Detroit News

It's a payday of sorts for the majority of Chrysler Group LLC dealers under a new Dealers Standards program that rewards performance.

About 75 percent of Chrysler's dealers are eligible for $1,500 to $200,000; the average payout is $12,200, spokesman Rick Deneau said Friday.

The monetary kudos comes as about 250 terminated dealers are using arbitration in a bid to restore their franchises. Of the first four rulings to date -- three in Florida and one in Ohio -- only one has gone in a dealer's favor.

Separately, Mark Chevrolet in Wayne on Friday said General Motors Co. had reinstated the retailer's franchise agreement in a move that avoids arbitration.

The restored Chevy dealership spent Friday preparing to order new vehicles from GM for the first time in almost a year. Mark Chevrolet was pursuing arbitration -- an appeal route ordered by Congress -- until reaching the deal, said Chris Cabana, new-car manager.

Chrysler's dealer standards program was established last fall under the new management of CEO Sergio Marchionne, who oversees a similar program at partner Fiat SpA. The goal is to improve the dealer experience with the incentive of quarterly cash credits for those who meet criteria on customer care as well as dealer management.

Chrysler employed outside firms to help evaluate the dealerships.

Among shuttered dealers seeking reinstatement via arbitration, the owner of Clarkston Chrysler Jeep in Southfield will be the first from Metro Detroit; the hearing gets under way Wednesday. Decisions have been coming a week or two after each hearing.

One area of contention in the legal skirmishes has been the availability of data on dealer performance that was used to decide which of the 3,181 dealerships Chrysler would keep as part of its bankruptcy restructuring. The automaker terminated 789 franchises.

This week, bankruptcy judge Arthur Gonzales confirmed the automaker should unseal portions of Chrysler's dealer spreadsheet that tracks the historical performance of all dealerships, but he stopped short of allowing individual dealers access to complete data on every dealer in the country.

Dealers can access data about their own businesses, as well as neighboring outlets with which the dealer was compared in deciding who would be kept and who would be let go.

This select data was available before the ruling if the dealer signed a confidentiality agreement and returned the information after the arbitration.

"There's absolutely no basis for the arbitrating dealers to have this information about any other dealer outside of themselves and that facing dealer," said Chrysler lawyer Gwen Young.

From The Detroit News: http://detnews.com/article/20100508/AUTO01/5080302/1148/auto01/Chrysler-rewards-dealers--results#ixzz0nLUs1JZB

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