Chrysler, Dealers Face-Off In Court

By: Associated Press Email
By: Associated Press Email

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Thursday, June 4, 2009

Chrysler and soon-to-be-former dealers duke it out in a New York courtroom today.

Chrysler wants a bankruptcy judge to allow it to terminate the franchise agreements of 789 of its dealers.

Dealers protest that the move could shutter their businesses for good.
Judge Arthur Gonzalez is expected to hear testimony from Chrysler LLC executives and dealers during what's expected to be a lengthy hearing.

Chrysler maintains that it needs to reduce its dealer base by about 25% to a leaner network of about 2,400 dealers in order to emerge from Chapter 11 bankruptcy protection as a stronger company.

But the dealers argue that they employ thousands of workers and don't cost the automaker anything.

A group representing about 300 of the dealers have filed an objection.

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