This former Chrysler dealership, in the Detroit suburb of Mt. Clemens, will turn to Indian automaker Mahindra in a bid to survive.
General Motors Co. and Chrysler Group LCC will reconsider decisions to close thousands of dealerships as part of a compromise meant to stave off federal legislation that would require them to keep the showrooms open.
Just how many dealers could stay open remains unclear and neither company made any specific commitments or estimates. Dealers involved in negotiations with both companies also said it is likely that only a handful closed dealerships will get a new lease on life from the review.
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The plans of GM and Chrysler Group LLC call for face-to-face reviews with dealerships and binding arbitration for those who challenge closure of their showrooms. Chrysler said its review process would start Thursday while GM said talks with dealers would begin in mid-January.
In return, however, GM and Chrysler wants dealers to drop support for any pending federal legislation that could hinder or halt the ongoing restructuring of the company’s dealer network. Dealers that have lost their franchises have pushed legislation that would give them additional leverage as they fight to stay open.
“GM will begin to implement this plan in mid-January provided that legislation related to GM’s dealer restructuring does not move forward,” the GM said in statement.
Perhaps not surprisingly, that generated a sharp rebuke from some of those who’ve been fighting the Chrysler and GM retail cutback strategies.
“We are greatly disappointed at today’s unilateral decisions by General Motors and Chrysler to end negotiations with dealer representatives and to publicize indefensible so-called reinstatement plan,” said the Committee to Restore Dealer Rights, in a statement. \
“We would say that their plans are shams, but that is an insult to the word ‘sham’ because the GM and Chrysler plans would at best reinstate only very, very few dealers, if any.”
Meanwhile, Jack Fitzgerald, a Washington, D.C. dealer who lost a number of Chrysler stores to the forced cuts, wonders whether the automakers are now wondering if their downsizing strategy was a good idea.
“I view this action as an admission that they need their dealers back because their sales are down,” said Fitzgerald, who has sold cars for more than 53 years, and Chrysler products for 43.
The GM/Chrysler plan stems from several months of discussion among dealer groups and members of Congress, improves transparency, creates a face-to-face review process and offers binding arbitration, which could result in the reinstatement of some dealers.
“GM values its dealer body and recognizes the contributions they are making to the future viability of the company, the critical role they play in satisfying customers and their importance to communities across the country,” said Susan Docherty, GM Vice President, U.S. Sales.
“We are prepared to implement this plan so GM and its dealers can channel our full focus on building and selling exceptional cars and trucks with the consumer experience to match,” Docherty said.