WASHINGTON -- Chrysler Group's second meeting with dealer groups last Friday ended with the two sides at an impasse over fundamental questions of reinstatement for rejected dealerships, participants said.
In contrast, General Motors Co.'s meeting Friday was described as more amicable, with the two sides finding some common ground.
GM proposed that rejected dealers submit appeals to company-sponsored mediation, and dealer representatives responded that they also should have access to third-party arbitration, participants said.
More talks are scheduled Thursday and Friday.
In last Friday's closed meeting at the U.S. Capitol, Chrysler representatives said the company planned to open 103 new franchises in various parts of the country, participants said.
The representatives, Chrysler vice president Peter Grady and Washington lobbyist John Bozzella, did not say where the new franchises would be located, participants said.
Chrysler circulated a written proposal that said rejected dealers would be given consideration if they applied for the new franchises. “Chrysler Group commits that it will not fill an applicable open point without first considering completed applications from rejected Old Carco dealers,” it said.
The 2½-page proposal said all candidates would have to submit information in standard dealer applications, such as past sales, service and parts performance and customer satisfaction ratings. Applicants also would have to include a business plan that includes staffing and management and a verification of adequate capital funding.
Applicants also would have to submit a plan “to provide an exclusive facility that meets Chrysler's standards and requirements at a preferred location with combined Chrysler, Jeep and Dodge representation,” the proposal said.
Dealer groups at the meeting rejected Chrysler's proposal, participants said.
They reiterated their Sept. 3 plan calling for automatic reinstatement of any rejected dealer that meets or exceeds automakers' objective criteria.
Dealer representatives at the meeting said Chrysler's proposal lacked both a provision for automatic reinstatement and objective criteria to be applied to possible applicants, participants said.
This year Chrysler restructured after bankruptcy by closing 789 dealerships, or a quarter of its stores.
GM's meeting ended amicably after company lobbyist Kenneth Cole proposed allowing dealerships targeted for termination to submit appeals to the company's mediation unit, participants said.
Dealer groups countered that that might be acceptable as long as rejected dealers also have access to third-party arbitration.
About 1,350 GM dealerships are to be eliminated by October 2010.
Some common ground
On some other issues, Chrysler and GM were in accord.
Both companies said they would give individual dealers access to the criteria applied in rejecting them.
Chrysler's proposal was greeted more skeptically by dealers than GM's, based on Chrysler's track record in dealing with rejected dealerships thus far, participants said.
Both companies also said they would consider intervening with finance companies on behalf of rejected minority dealerships to seek debt reductions, participants said.
Chrysler and GM declined comment, as did leaders of the National Automobile Dealers Association and the three other dealer groups in the talks.
Congressional leaders who organized the talks have called on Chrysler and GM to disclose the rejection criteria and reinstate dealers that met them.
Dealers who dispute the grounds for termination should have the right to appeal to third-party arbitrators, lawmakers have said.
Rep. Chris Van Hollen, D-Md., said last week that compensation should be offered to rejected dealers whose stores qualify for reinstatement but already have closed.
The talks, which began Sept. 30, were organized as an alternative to legislation that would reverse more than 2,100 rejected dealerships.
The legislation passed the House this summer but stalled in the Senate.
House leaders have said that if the talks break down, they would consider reviving the legislation.