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Chrysler won’t copy GM on dealer contracts

by Bill Cawthon on

Saying it never had contracts with the dealers terminated by the former Chrysler LLC, Chrysler Group has no plans to offer those dealers new contracts outside of arbitration. This is in contrast to General Motors which plans to reinstate 661 of the 1,160 franchises it cut.

By the end of January, 418 of the 789 dealers cut last June had paid to have their cases heard by an arbitrator. According to Chrysler, that number has now fallen below 400 as some dealers have had second thoughts or reappraised their business prospects.

The major difference between the two car companies’ situations is the fact terminated Chrysler dealerships have already stopped selling Chrysler cars and trucks while GM’s dealers are in the process of winding down franchises and still have contracts to sell GM vehicles. Since Chrysler Group did not have a business relationship with the former franchisees, an arbitrator’s ruling in favor of a dealer would likely result in the dealer receiving a letter of intent.

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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