Like GM, Chrysler should reinstate rejected dealers, lawmaker says
Photo credit: Reuters
Rep. Chris Van Hollen, the sixth-ranking House member, noted that Chrysler itself has said a strong dealer network is instrumental to the company's growth.
“There's no quicker or easier way to build this network than to reinstate its terminated car dealerships,” Van Hollen, D-Md., said in an e-mail yesterday to Automotive News.
"Chrysler should follow GM's lead and reinstate terminated dealers."
Van Hollen's comments carry special clout because he is the assistant to House Speaker Nancy Pelosi. He played a critical role in drafting and passing legislation that provided arbitration for rejected GM and Chrysler dealerships seeking reinstatement.
“We appreciate the opportunity to comment, but we would respond directly to Rep. Van Hollen,” Chrysler said in an e-mail response.
On Friday, GM said it planned to reinstate 661 of the 1,160 rejected dealerships that have filed for arbitration. The company said it has notified all 661 of its plans to send them a letter of intent and enter talks outside the arbitration framework.
No reinstatements signaled
On Monday, Chrysler signaled it has no plans to reinstate any of the 400 or so dealerships that have paid $1,625 apiece to give notice of their intent to seek arbitration.
“Dealer appointments will be a function of the arbitrations,” Chrysler said in an e-mail. “The company looks forward to the expeditious completion of the arbitration process.”
Chrysler shut 789 dealerships last spring as part of its bankruptcy proceeding.
The company also rebuffed a request by a leader of a group of rejected dealers to discuss possible reinstatement of closed showrooms.
Tammy Darvish, a co-leader of the Committee to Restore Dealer Rights, e-mailed Chrysler CEO Sergio Marchionne last weekend asking “to discuss the reinstatement of the rejected dealers who had their franchises so abruptly taken and were unfairly terminated,” a copy of the message shows.
Her e-mail followed GM's announcement of planned reinstatements.
Darvish, a Maryland-based dealer, also has filed for arbitration to seek restoration of her own Chrysler franchises in Fairfax, Va., and Jacksonville, Fla.
A Chrysler lawyer rejected Darvish's request for general reinstatement talks in an e-mail to her dealership attorney last night.
“We believe that all communications concerning the subject matter of the arbitration should be between counsel and request that your clients follow this procedure in the future,” said Chrysler lawyer Robert Cultice of WilmerHale in Boston. “Please ask them not to send such communications to Mr. Marchionne or any other Chrysler personnel.”
The Chrysler e-mail did not acknowledge that Darvish wears two hats as both a dealer and as one of three leaders of the Committee to Restore Dealer Rights, which lobbied successfully for the new arbitration law.
“This is communication between counsel in pending legal matter, so it would be inappropriate to comment,” Chrysler said in an e-mail yesterday.