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Chrysler moves ahead with arbitration for terminated dealers

by Bill Cawthon on

Even as it works on a legal challenge to a new federal requiring arbitration for terminated dealers, Chrysler Group is moving ahead with the arbitration process.

In December, responding to an outcry from automobile dealers, Congress passed legislation giving dealers the right to submit disputes over terminations to binding arbitration. Decisions are required within six months of the arbitration hearing.

The 789 dealers that had their franchises terminated in the cuts the automaker made last year were sent letters just before Christmas. The letters, required by the new law, supplied contact addresses for correspondence. Today, the dealers will begin receiving a follow-up letter outlining the new law, the criteria used in determining which franchises would be terminated and the arbitration process.

Both Chrysler and General Motors Co. cut large numbers of dealerships while each company went through the bankruptcy process last year. After hearing hundreds of appeals, GM reversed its decision in about 80 cases. Chrysler, on the other hand, did not accept any appeals and has not changed its mind on any of the terminations.

Bill Cawthon grew up in the auto industry in the 1950s. His Dad worked for Chrysler and Bill spent a number of Saturdays down on the plant floor at Dodge Main in Hamtramck. Bill is also the U.S. market correspondent for, a British auto industry publication, and a member of the Texas Auto Writers Association, which has named the Jeep Grand Cherokee the “SUV of Texas” several times and named the Ram 1500 as the “Truck of Texas” two years running.

Bill has owned five Plymouths (including the only 1962 “Texan”), one Dodge and one Chrysler and is still trying to figure out how to justify a Wrangler. He also has owned at least one of every 1:87 scale model of a Chrysler product. You can reach him directly at (206) 888-7324 or by using the form.

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