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Chrysler Plans Closure Of Local Dealerships

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May 14, 2009 4:40 pm US/Eastern

Chrysler Plans Closure Of Local Dealerships

Reporting
Jon Delano
PITTSBURGH (KDKA) ― The bad news out of Detroit never seems to stop, and today the focus was on Chrysler's 3,200 dealers across the country.

Dealers received letters notifying them of their status with the automaker, and as the day ends, Pennsylvania dealers have taken the biggest hit.
 
The handwriting was on the wall for many of Chrysler's dealerships a couple weeks ago when the company declared Chapter 11 bankruptcy.

"This is not a sign of weakness, but one more step on a clearly charted path to Chrysler's revival," President Obama said at the time.

Even though the company tried to avoid bankruptcy with a cost-saving deal with its auto workers, its creditors -- especially the hedge fund creditors -- balked.

"They were hoping that everyone else would have to make sacrifices and they would have to make none," the president said.

Forced into bankruptcy, Chrysler hopes to emerge in 30 to 60 days much leaner with a new partnership with Fiat.

"It's a partnership that will give Chrysler a chance, not only to survive but to thrive in a global auto industry."

But Fiat wants Chrysler restructured more like foreign competitors and that means shedding one quarter of its dealerships across America.

In court papers filed with the bankruptcy court, Chrysler announced it wants to drop 789 dealerships nationwide, 53 in Pennsylvania and at least 17 in this region.

The company says it has too many dealers and that about half the dealers account for 90 percent of its sales.

In 2008, for example, while Toyota sold 1,292 vehicles per store and Honda sold 1,030 per store, Chrysler sold just 303 vehicles per store.

Chrysler says too many of its dealerships are in rural areas or in cities losing population and consolidation will save dollars.

Dealers who feel unfairly targeted can appeal to the bankruptcy court which is expected to rule on the closings on June 3.

Of course, the dealers aren't the only ones to feel the pain. Some 27,000 Chrysler employees have been laid off.

One piece of good news -- Fiat announced that it would continue health coverage for Chrysler's retired salaried workers.

As to the dealership closings, watch for other companies to do the same.
General Motors is expected to notify 2,600 dealers, perhaps as early as tomorrow, that they, too, will lose their GM franchise.


The list of Chrysler closings for this region include:
  • Baumgardner Motors (Windber)
  • Beckman Motor Co. (Mt. Oliver)
  • Burgunder Motors Inc. (Bridgeville)
  • Century III Dodge (Pleasant Hills)
  • Corwin Jeep Sales & Service (Hickory)
  • Day's Baum Boulevard Dodge (Pittsburgh)
  • Golick Chrysler-Jeep (Pitcairn)
  • Graft Chrysler-Dodge-Jeep (Scottdale)
  • Kalmar Motor Sales (Leechburg)
  • Krebs Chrysler Jeep (Glenshaw)
  • Krebs Motors North (Gibsonia)
  • Lieberth & Sons Dodge (Oakmont)
  • Graham Colonial Motors (Ligonier)
  • Tomsic Motor Co. (Washington)
  • Tri Star DCJ Huntingdon Inc. (Huntingdon)
  • Verona Motor Sales (Verona)
  • Wright Dodge (Wexford)
Stay with KDKA for the latest on this developing story.

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