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Chrysler seeks to close one quarter of its 3,200 U.S. dealerships

2009-05-14 16:15:29 (GMT) (Caymanmama.com - Automotive Top Stories News)

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Atlanta, Georgia (CaymanMama.com) –The automotive industry can’t seem to catch a break in recent months. For one in particular, business is growing smaller each day. Chrysler LLC is now seeking to shutter nearly a quarter of it’s 3,200 U.S. dealerships by early June.

In a bankruptcy court filing Thursday, the automaker said that that the network is outdated and has an excess of stores competing with each other.

Chrysler LLC, in a motion filed with the U.S. Bankruptcy Court in New York, said it wants to close 789 dealerships by June 9, claiming many of the dealers’ sales are too low. Just over half of dealers make up for nearly 90 percent of the company’s American sales, the motion said.

According to the Associated Press, “Dealers were told Thursday morning via United Parcel Service letter if they would remain or be eliminated. The move, which the dealers can appeal, is likely to cause devastating affects in cities and towns across the country as thousands of jobs are lost and taxes are not paid.”

Chrysler spokeswoman Kathy Graham did not comment on the matter except to say the automaker will notify dealers before making a public announcement. A hearing is set for June 3 in U.S. Bankruptcy Court in New York to decide whether to approve Chrysler’s motion.

Don Burk, co-owner of Heritage Chrysler Jeep in Ozark, Mo., said he learned that Chrysler is seeking to close his dealership after opening his UPS letter Thursday morning.

“Right now I’m processing the information,” he said after reading the letter. “I’m sure I’m going to get with my partner and we’ll decide what to do from here.”



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