The Chrysler Group came out on top in 70% of the arbitration cases filed against it; having prevailed 73 times out of 105. Chrysler rejected 789 dealerships as part of last year”s bankruptcy, but was forced to establish an arbitration process, as was GM, in order to hear the arguments of those dealers seeking reinstatement.
Arbitrators generally deferred to Chrysler”s “˜Genesis Project”, whereby the company plans to consolidate all four of its brands in each dealership. “The decisions to select dealers for the company’s optimized dealer network were carefully considered as part of Chrysler’s Genesis Project,” the company’s statement said. “The decisions of a great majority of the arbitrators reflect the belief that the company’s dealer network decisions were not only appropriate but essential to its future success.”
Many attorneys representing dealers disagreed, citing the fact that all closings were decided and arbitration conducted prior to the release of inspector general Neil Barofsky”s audit. Attorneys claim many less dealers would have been closed, and that Chrysler”s criteria for shutting down dealerships consisted of nothing more than unproved theory disguised as fact.
Though arbitration is finished, not all letters of intent have been signed; there are details particular to each dealership that must be hashed out by attorneys prior to signing an LOI.
– By: Stephen Calogera
Source: Automotive News (Subscription Required)