Chrysler's Dealers, Minus 1,000

After we already told you the plans GM has with a large part of its dealers, here comes the unpleasant task to do the same for Chrysler. According to some reports surfaced yesterday, the bankrupt American manufacturer has plans to close no less than 1,000 dealerships. And this may happen rather sooner than later, as notices to the respective dealers could be handed out starting today.

Chrysler has neither confirmed, nor denied the reports. According to Chrysler spokeswoman Kathy Graham, speaking to Reuters, "we have not announced anything at this point. We are not done with our process at this point."

Still, in an internal memo obtained by the aforementioned source, Chrysler's CEO Bob Nardelli said the company will decide soon how to reorganize its dealer network, as part of the bankruptcy process.

Such a measure, combined with the cuts announced by GM, will raise the number of affected dealerships to almost 3,000. The National Automobile Dealers Association (NADA) is unlikely to sit back and watch, but it is also unlikely it can do something about it.

A group of NADA representatives met yesterday with members of House of Representatives and Senate in Washington for talks over the matter, but no conclusion has yet been reached. Chrysler's dealers are expected to pursue legal action should the manufacturer proceed with the reported cuts.

If Chrysler joins GM in the dealership onslaught, the total number of jobs lost because of this may surpass 200,000. Over half of them come from GM's network.

Developments on both Chrysler's and GM's actions are to be expected and we will present them as they unfold.