Chrysler green lights new dealerships

Jeremy Hobson Aug 14, 2009
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Chrysler green lights new dealerships

Jeremy Hobson Aug 14, 2009
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Steve Chiotakis: Shortly after Chrysler went into bankruptcy back in April, it announced it was closing 789 dealerships across the country to get its inventory back in line with market demand. But now, it’s actually planning to open new dealerships. In some cases, not far from the ones that are closing. Here’s Marketplace’s Jeremy Hobson.


Jeremy Hobson: Chrysler argued it had to cut loose dealerships to bring supply in line with demand.
But Edmunds.com auto analyst Michelle Krebs says it’s now clear Chrysler took advantage of its situation to shut dealerships it had wanted to close for some time.

MICHELLE KREBS: State franchise laws were written largely by dealers, they’re very protective of dealerships and it’s very hard to get rid of a dealership even if they’re a very bad one.

Unless, of course, you’re in federal bankruptcy protection. Krebs says Chrysler’s move is all about location. Even putting a dealer a few blocks away from where it’s been for decades could boost sales dramatically. Dealers like Wade Walker in Vermont are not amused by Chrysler’s reshuffle.

WADE WALKER: Why would an auto-dealer want to invest millions of dollars and build a facility, build a clientele all to have it ripped away through a bankruptcy process?

Walker says he’s lost 25 percent of his business since he was forced to stopped selling Jeeps.

In New York, I’m Jeremy Hobson for Marketplace.

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