DETROIT -- Chrysler LLC's plan to eliminate a quarter of its U.S. dealerships by June 9 means the vast majority of the surviving stores will sell the Jeep, Dodge and Chrysler brands under the same roof -- a longstanding goal of the bankrupt automaker.

Under the strategy outlined today, 789 dealerships will be shut down and 2,392 will survive to become part of Chrysler's planned alliance with Fiat S.p.A. (See lists at right.)

About 80 percent of the remaining dealers will carry all three brands, compared with 62 percent currently, the automaker said in court filings. That will help meet the goals of Project Genesis, the 2008 strategy to put the brands in the same showrooms.

The cuts are being made "with a deep sense of sadness,'' Steven Landry, Chrysler's executive vice president of sales, said in a statement. He said Chrysler used a "data-driven matrix" to make the decisions. The dealers targeted for closing account for 14 percent of Chrysler's U.S. sales volume, he said.

The remaining dealers will be left to battle the worst U.S. market for auto sales since 1981 as the longest recession since the Great Depression continues to take its toll. So far this year, Chrysler dealers have sold 323,890 vehicles in the United States, down 46 percent from a year earlier and 64 percent below the four-month total of 1999, when the operation was on its way to its peak sales year.

Chrysler President Jim Press told reporters during a conference call that "there is no appeal process." Chrysler executives also said bankruptcy laws don't require them to buy vehicles, parts and tools from terminated dealerships.

A memo from one Chrysler district manager to dealers in one district said that through June 9, the targeted stores would operate "business as usual" under a "court review" period. Warranty and incentive payments would be made through June 9, the memo said.

Chrysler executives said the rejected dealers have about 44,000 new vehicles in inventory. Of those, about 4,000 are 2008 models and the rest are 2009s.

"We expect to redistribute the majority of the 2009s over the next three to four weeks," said Landry. "We have no plans to go to auction" with the vehicles.

Landry said Chrysler will help broker the transactions.

Since Chrysler factories are shut down during the bankruptcy period, Landry said he believes surviving dealers will pick up the inventory.

Spreading the word

Landry said Chrysler will send letters to approximately 3.5 million customers of the rejected dealers so they know where to go for parts, service or a new-vehicle purchase.

Press said Chrysler alone was responsible for compiling the list. He said the same methodology was applied to all dealerships.

"While we made Fiat and the U.S. Treasury aware of the methodology, they were not involved. We're the ones responsible solely here for the decisions that have been made.

"There are no winners and there are no losers. This is the way it is. This is a company working its way out of a Chapter 11 situation."

Chrysler needs to be sure surviving dealers are prosperous and have a good chance to be profitable, he said.

Stronger partners

Landry said 345 of the targeted dealers, or 44 percent, are dualed with a "competitive franchise that's stronger than ours."

He said 658 of the rejected dealers, or 83 percent, already sell more used vehicles than new ones.

"The majority of these dealerships are going to continue on and prosper, either selling used cars or other brands," said Landry. Half of them sell fewer than 100 new vehicles per year, he said.

Mike Jackson, CEO of AutoNation Inc., the largest public dealership group, called the dealer consolidation plan long overdue. But he said it could put pressure on vehicle prices in the short term.

"This is an unprecedented event in the midst of an unprecedented economic situation," Jackson said. "I think it's a relatively short-term painful event."

Referring to expected stepped-up incentives to clear inventory, he said: "It's going to be an exceptional time for consumers."

The National Automobile Dealers Association estimates that an average U.S. dealership now employs 48 people. If the targeted Chrysler stores fit that profile, today's announcement would affect 37,872 employees.But Press said actual job losses would be far smaller, because some stores will continue to sell used vehicles and some are part of a group whose other retail operations would provide jobs.

Reuters contributed to this report