Chrysler LLC, the automaker that began as Chrysler Corporation in 1925, a year after it first car was introduced, will close about 25 percent of the dealerships, according to the plan the manufacturer has filed in bankruptcy court. The consolidation will result in the demise of 789 dealerships.
"It is with a sense of profound sadness that we must take these steps and reject some of our dealer sales and service contracts," Steven Landry, Chrysler's executive vice president for North American sales, explained in letters delivered to the departing dealerships. “But it is a necessary step."
Like other manufactuerers, Chrysler has struggled with a suffering economy. But it lso has had had several brands in recent, including the Jeep Commander and Chrysler Sebring that never provided sales to match high expectations.
Chrysler had a total of 3,181 authorized dealers in operation at the time of its April 30 bankruptcy court filing, according to court filings. Just over half of that number accounted for more than 90 percemt of Chrysler sales, according to the filing.
According to Chrysler, dealers being shut down represent 14 percent Chrysler's total sales.
Chrysler's pending
plans to close dealerships must still be approved by U.S. Bankruptcy Court Judge Arthur Gonzalez, who is overseeing the company's the government-led restructuring.
"It is with a deep sense of sadness that we must take steps to end some of our Sales and Service Dealer Agreements," said Landry. "The decision, though difficult, was based on a data-driven matrix that assessed a number of key metrics."
According to Chrysler, about half the dealerships expected to close sell fewer than 100 vehicles per year. About 44 percent of the dealerships involved also sell of manufacturers' vehicles.
Under the bankruptcy plan, dealerships will have until June 9 to close their Chrysler franchises.
Chrysler's pending