WASHINGTON -- Two Republican lawmakers have asked Chrysler Group to stop awarding franchises in the markets of rejected dealerships that have filed for arbitration.
“We are concerned about your treatment of the loyal Chrysler dealerships that have stood by your brand for decades,” Reps. Pete Hoekstra of Michigan and Steven LaTourette of Ohio said in a letter to Chrysler CEO Sergio Marchionne.
The letter, dated yesterday, says a shuttered dealerships could win reinstatement from an arbitrator, yet be prevented from reopening because a new franchise already had been awarded in that market.
“Dealerships deserve a good-faith effort entering the arbitration process,” the letter says.
Chrysler did not immediately respond to a request for comment.
In recent weeks, a number of rejected dealers have complained about Chrysler’s new franchise awards.
In unsuccessful settlement talks last fall, Chrysler told dealer groups that it planned to award about 100 new franchises in the United States. The company has declined to confirm or update this figure.
Dealer groups have unsuccessfully requested that rejected dealerships be given the right of first refusal for any franchise awarded in their former markets.
“Chrysler has blatantly circumvented this process as a sick sport,” said Tammy Darvish, co-leader of the Committee to Restore Dealer Rights, a group of rejected dealerships. “This behavior of Chrysler is an embarrassment to business ethics in America.”
Hoekstra, who is running for governor in Michigan, sent a similar letter to General Motors Co. last month.
But Darvish said her group has gotten many more complaints from rejected dealerships about Chrysler’s awards than about GM’s.
More than 400 of the 789 closed Chrysler dealerships have paid $1,625 apiece to file notice of their intent to seek arbitration. Arbitrators are now being assigned to different cases. The arbitration process must be completed by mid-June unless extended for a month by arbitrators.