Chrysler Dealers' Armageddon

Even if Chrysler seems to live in a soap bubble and tries, with the aid of advertising agency BBDO Detroit to convince us that "it's business as usual", the reality of their bankruptcy is much more darker. No one feels this better than the manufacturer's dealers, who now see their showrooms void of customers and their businesses threatened by collapse.

Up until now, hundreds of dealers across the US have closed up shops. As James Arrigo, the co-chairman of Chrysler's National Dealer Counsel was quoted as saying by Reuters, "a lot of these guys right now are just trying to survive." Arrigo, one of Chrysler's top ten dealers himself, says that his business dropped by 50 percent in 2009.

Chrysler's black Thursday didn't help either. "People are walking in front of the door, saying 'I would be interested, but I have no idea if you're going to be here in two to three years," Arrigo said in front of the Manhattan bankruptcy court on Monday.

Chrysler appears to be aware of the problem, but can do nothing to help them. As one of Chrysler's executives said in court on Monday, the dealers have "some significant issues with capital and liquidity right now, many of them are on the razor's edge." Chapter 11 came as a final blow for the dealers, as it smothered the strongest selling seasons: spring-summer.

Since January, around 400 Chrysler dealerships have been closed, reaching an alarming rate of 35 to 40 per month. So what? you may ask. Michael Bernstein, lawyer with Arnold & Porter said it the best: "The dealers are nearly the only source for revenue that Chrysler has."

Things are bound to get worse, as now Chrysler forecasts it will become profitable no sooner than 2012.