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Former Chrysler dealership hits a snag

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Former Chrysler dealership hits a snag

Despite getting license to sell again, it can't get cars



DENVER -- A car dealer's effort to start selling Jeeps and Chryslers again has hit a roadblock.

The Phil Long Denver Jeep Chrysler dealership was among 789 dealers the Chrysler Group tried to shed last year before emerging from bankruptcy. Congress set up an arbitration process to let dealers appeal. The Denver dealer has a temporary state license to sell new Chryslers and Jeeps again.

However, Chrysler has already awarded the right to sell Chryslers and Jeeps to Go Dodge, a dealership across the street. The Phil Long dealership says Chrysler hasn't agreed to sell it any new vehicles.

Instead, Chrysler is asking a federal judge to rule whether the arbitration process set up by Congress is trumped by a Colorado law that lets existing Chrysler dealers protest and essentially block another dealer from launching -- or relaunching -- nearby.

"Chrysler will not win this battle," Phil Long CEO Jay Cimino wrote in a letter to Chrysler CEO Sergio Marchionne.

Auburn Hills-based Chrysler is tangled in similar disputes involving state dealer laws in California, Montana, Ohio and Florida.

Cimino told Marchionne he would walk away from the dispute for $5.5 million, the amount he said the dealership lost in the fight to keep selling Jeeps and Chryslers. He said the business also might be interested in a settlement that would award it a Fiat dealership. Fiat Group controls Chrysler.

"The $5.5 million is a fraction of what we've lost," Cimino said. "We lost money, key employees, human dignity."

Chrysler said in a written statement that it is engaged in litigation to resolve issues affecting issuance of a sales and service agreement to Phil Long. It said it would be inappropriate to discuss the matter further while it is in litigation.

Chrysler contends in its complaint, filed in U.S. District Court in Michigan, that some of its existing Denver-area dealers have said they intend to protest Phil Long's relaunch. The complaint listed dealers with protest rights in Colorado but didn't say which ones intended to mount a challenge.

A Go Dodge vice president did not return a message seeking comment.

Chrysler contends Phil Long's arbitration win committed the automaker to extend a letter of intent for a sales and service agreement, but it didn't promise to add the dealer to its network if the dealer couldn't meet operational prerequisites and other conditions.

Read more: Former Chrysler dealership hits a snag | freep.com | Detroit Free Press http://www.freep.com/article/20101102/BUSINESS01/11020361/1331/business01/Former-Chrysler-dealership-hits-a-snag#ixzz1482zgi6B

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