Chrysler to revive 50 dead dealerships

By Blake Ellis, staff reporter


NEW YORK (CNNMoney.com) -- Chrysler Group will offer to reinstate 50 of the 789 dealers terminated last year as part of the automaker's bankruptcy, the company said Friday.

Half of those Chrysler shut down -- nearly 400 former dealers -- filed last month for an arbitration hearing to appeal their termination. The 50 chosen by Chrysler to rejoin its network are among those who had appeals pending. The automaker said it will send them letters of intent offering reinstatement as "full-line" representatives.

"The 50 dealers are in locations that offer customer service benefits and will have limited adverse impact on the dealers within our current network," Chrysler said in a statement.

These dealers should receive their letters "within the next few days," according to a company spokeswoman. Under the terms of the agreement, the dealerships will need to meet "standard conditions" for capitalization, facility buildout and management, she said.

Chrysler gave the almost 800 dealers it targeted for termination just 30 days to cease operations, shutting them down in June 2009. But the company has since reconsidered some cases, and has over the past eight months offered to reinstate 36 dealers. Friday's decision brings the total number of dealerships being revived to 86.

The National Automobile Dealers Association said it is pleased with Chrysler's decision to restore these dealerships, calling it "a move in the right direction."

"NADA views this as a good faith effort, and hopes that this carries forward in Chrysler's continuing settlement and arbitration discussions with the other terminated dealers," the association said in a statement.

In its statement Friday, Chrysler said "discussions to find mutually beneficial alternatives to arbitration with other dealers are under way." More than 300 former dealers are still in the queue for arbitration hearings, to be held over the next three months.

Chysler's offer to resurrect some of its axed dealers echoes one made earlier this month by General Motors, which moved to reinstate 661 of the dealerships it cut from its network last year. To top of page

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