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Update: Chrysler offers reinstatement to 86 dealers

by Bill Cawthon on

In the next few days, Chrysler will send out letters offering reinstatement to 50 former dealers who have appealed to have their termination cases heard by an arbitrator. This is in addition to 36 offers of reinstatement that have already been extended to dealers. The offers are focused on dealerships in areas where reinstating a franchise would have minimal impact on other dealers in the market and where there would be positive customer service impacts.

While the automaker has not divulged specific requirements, standards for restoration of a franchise are said to be fairly steep. The company says all reinstated dealerships will offer all four Chrysler brands under one roof.

Ed Tonkin, the new chairman of the National Automobile Dealers Association, called Chrysler’s latest actions a “move in the right direction.”

The 86 franchises account for about 11% of the 789 franchise Chrysler revoked in bankruptcy last year. The terminations by Chrysler and General Motors led to the passage of federal legislation requiring such terminations to be resolved through arbitration and the consideration of laws in numerous states that would extend additional legal protection to automobile franchisees. Chrysler has vowed to fight any new restrictions at the state level.

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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