Chrysler makes concession to terminated dealers

Facing possible legislation restoring the franchises of 789 dealers cut by Chrysler during its brief stay in bankruptcy, the automaker has agreed to stop offering the terminated dealers’ former territories to new dealers. The company says the action will continue throughout the negotiations it is having with dealer representatives and the National Automobile Dealers Association.

Chrysler’s practice, which it had stepped up recently, created a lot of ill will among the former dealers, who believe they should be offered the right of first refusal if the company wants to expand into the areas they once served. It also raised some eyebrows on Capitol Hill.

Legislation restoring the franchises passed the House, but got stalled in the Senate. Dealers can drum up a lot of support among legislators because they are not only constituents, they are often generous supporters of favored candidates.