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Chrysler puts new franchise awards on hold in terminated territories

by Bill Cawthon on

Chrysler says it will suspend the awarding of new franchises in markets previously served by dealers who were terminated last year.

In a statement, the company said, “Chrysler Group understands that the practice at this time may be a cause of concern among policymakers and among arbitrating dealers. As a measure of good faith, Chrysler Group will not proceed with network actions that directly impact an arbitrating dealer until the arbitrator has had a chance to rule in that case.”

According to Chrysler, the only exceptions would be those cases in which the automaker was “contractually obligated” to award the new franchise.

Chrysler plans to award only about 100 new franchises, a number nowhere near the 789 franchises terminated in June 2009 or enough to satisfy the nearly 400 dealerships that have filed for arbitration under legislation signed into law by President Obama last December.

Tamara Darvish, one of the leaders of the Committee to Restore Dealer Rights, a group representing dealers cut by Chrysler and General Motors, called the Chrysler action “window dressing to placate Congress.”

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 just-auto.com, 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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