All 3181 Chrysler Dealers May Face Elimination
Posted in the Chrysler Forum
#1 May 21, 2009
Chrysler Marketing Chief Warns That All 3181 Dealers May Face Elimination
Chryslers marketing chief is issuing a stark warning to those who insist it didnt need to fire 789 of its dealers as part of its court-protected bankruptcy reorganization.
The stark reality is all 3,181 dealers will face elimination, Steven Landry, executive vice president of marketing, asserts in a new posting on the automakers blog, TheFirehouse.biz.
The troubled automaker, which filed for Chapter 11 bankruptcy protection, late last month, has taken some sharp criticism for its decision to eliminate nearly a quarter of its retail body, but in his blog, Landry insists the process of choosing which retailers to drop was thorough, rigorous and fair, and was based on a data-driven metric that looked at factors such as sales volumes, customer satisfaction, and whether the dealer handled all or just some of Chryslers three brands.
#2 May 21, 2009
AUBURN HILLS, Mich., May 21 /PRNewswire/-- The following are details on the current condition of Chrysler LLC dealer network.
Comments can be attributed to Steven J. Landry, Executive Vice President, North American Marketing and Mopar Parts and Service - Chrysler LLC:
"The automotive industry cannot support the number of dealers currently in the marketplace. From 1990 until 2007, the industry averaged roughly 16 million new vehicles sold each year. In 2009, new vehicles sold are expected to be 10.5 million units.
"In 2008 Chrysler dealerships did not make a profit. The average loss was $3,184 per dealer.
"Chrysler is treating the rejected dealers fairly by assisting in the redistribution of remaining vehicle and parts inventory, paying incentive and warranty payments due.
"It was not an easy decision to ask the court to reject a portion of our dealer contracts, but the reality is Chrysler's viability depends on a vibrant, profitable dealer network. As presently configured, Chrysler's dealer network does not meet that test. If the sale to Fiat is not approved by the Bankruptcy Court, the stark reality is all 3,181 dealers will face elimination.
"The process to evaluate dealers was a thorough, rigorous process that used a data-driven metric that included the following factors:
Minimum Sales Responsibility
A scorecard that measured sales, share, shipments, customer satisfaction index, service satisfaction index and warranty repair
Facility (capacity, Millennium II standards)
Location (optimum retail area)
Dual (Dealer is dualed with a competing manufacturer)
The market's total sales potential
"Under this plan, 2,392 dealers across the United States move forward with the new company. It doesn't mean that the 789 rejected dealers will close if this motion is approved by the Court:
44 percent of the 789 "rejected" dealers are dualed with another (competing) new vehicle franchise and can continue to sell those makes of vehicles
83 percent of the 789 "rejected" dealers sell more used than new vehicles, many of these dealers will continue selling and servicing pre-owned vehicles
"Chrysler began the process to consolidate dealerships and locate all three brands under one roof more than 10 years ago. The Company made the decision it was cost prohibitive to continue to manufacture and market overlapping products. Going forward, we will not do that, so it is critical the majority of our dealers offer customers all three brands under one roof."
SOURCE Chrysler LLC
Source: PR Newswire
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