In late April, Bob Wilson Dodge-Chrysler-Jeep closed its doors and filed for Chapter 11 bankruptcy protection in Tampa, Fla. The bankruptcy reorganization petition blamed Chrysler LLC's Project Alpha dealer consolidation program for its troubles.
The rapid onset of financial problems at the high-volume Wilson store shows that Chrysler's plan to slim down its dealer body will be painful for some.
In February, Chrysler announced it was renaming its Alpha program Project Genesis. The new program has ratcheted up pressure on dealers to buy or sell their stores. Chrysler now wants most dealers to sell all three brands under one roof and is trimming clone models that compete with one another.
With auto sales tumbling and tight credit, dealers are wary of investing in store improvements. To further complicate matters, Chrysler says it is not offering financial aid to help dealers sitting on the fence. Chrysler also says dealers combining under Genesis must sign exclusivity agreements barring them from selling other brands at their Chrysler stores. With the industry in turmoil and Chrysler's future uncertain, that can be a tough sell.
In addition, the Genesis program reduced facility requirements by 12 percent in view of the slimmer projected product lineup. But some dealers had already invested in larger facilities under Alpha's larger planning requirements.