WASHINGTON -- Chrysler Group has agreed to temporarily stop giving dealers new franchises in areas vacated by rejected dealerships, negotiators in talks between the automaker and dealer groups said today.
Chrysler's representatives made the disclosure Wednesday in the first private negotiation with dealer groups and lawmakers, five participants said. Chrysler said its halt will last for the duration of the negotiations, the participants said.
“We were encouraged by that,” said Alan Spitzer, an Ohio dealer who helps lead a group of rejected dealers called the Committee to Restore Dealer Rights.
Spitzer, who was at the meeting at the U.S. Capitol, added: “It was a positive sign that they are at least willing to work with us and listen to us.”
The committee requested Chrysler's moratorium.
"It's good that they did that," said John McEleney, chairman of the National Automobile Dealers Association, who was at the meeting. "It's responsive."
Chrysler's practice has infuriated rejected Chrysler dealers who contend they should be considered first any time the company decides to re-enter their former territory.
It also has aggravated Rep. Chris Van Hollen, D-Md., assistant to House Speaker Nancy Pelosi.
“The practice raises questions about Chrysler's intentions,” said Van Hollen, who was not at Wednesday's negotiation with Chrysler.
Chrysler has stepped up the practice nationwide in recent months, said the congressman, who has played a key role in organizing the talks.
He said that Chrysler should give first consideration to the closed dealerships any time it re-enters their former area.
Chrysler spokeswoman Linda Becker declined comment today.
After yesterday's meeting, Chrysler lobbyist John Bozzella said: “We're talking. We're working through tough issues. It was a good meeting.”
The second round of meetings between Chrysler, General Motors Co. and dealer groups is scheduled for tomorrow, a congressional aide said.
The talks are intended as an alternative to legislation that would reverse terminations of 789 Chrysler stores and halt General Motors Co.'s plans to shutter 1,350 dealerships.
The legislation passed the House this summer but stalled in the Senate.