Judge To Rule On Termination Of Franchises Over Chrysler

By: Associated Press Email
By: Associated Press Email

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Wednesday, June 3, 2009

A bankruptcy judge is getting ready to decide whether Chrysler can terminate the franchise agreements of 789 of its dealers.

U.S. Judge Arthur Gonzalez is expected to hear testimony Wednesday from Chrysler executives and dealers.

Auburn Hills, Mich.-based Chrysler says it needs to reduce its dealer base in order to cut costs and restructure. It says that many of the dealerships in question are either unprofitable or located too close to other Chrysler dealerships.

But the dealers say they don't cost the automaker anything, just make it money by selling its cars and trucks.

Late Tuesday, a U.S. court agreed to hear an appeal by a group of Indiana pension and construction funds of the sale of most of Chrysler's assets to a group led by Italy's Fiat Group SpA, according to media reports.

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