WASHINGTON -- Chrysler Group, reversing an earlier stance, said today it will offer to reinstate 50 closed dealerships within the next few days.
Letters of intent will be sent to 50 of the estimated 400 rejected dealerships that have applied to get their franchises back through arbitration, Chrysler said in a statement.
They “are in locations that offer customer service benefits and will have limited adverse impact on the dealers within our current network,” Chrysler said.
No letters of intent have been sent yet, Chrysler said. Each of the dealerships that stand to be reinstated would house all four Chrysler brands under one roof.
In the statement, Chrysler also revealed that it already has awarded contracts and or sales or service agreements to 36 other closed dealerships since July based on individual circumstances.
The company also said it is entering settlement talks with an unspecified number of dealers with shuttered stores.
The disclosures show Chrysler has reinstated or is trying to reinstate 86 dealerships, or 11 percent of the 789 dealerships that were closed in June as part of its bankruptcy.
The company signaled as recently as two weeks ago that it had no plans to reinstate any of the 400 or so dealerships that have given notice of their intent to seek arbitration.
The National Automobile Dealers Association called Chrysler's announcement "a move in the right direction."
"NADA views this as a good-faith effort and hopes that this carries forward in Chrysler's continuing settlement and arbitration discussions with the other terminated dealers," association Chairman Ed Tonkin said in a statement.
A leader of the Committee to Restore Dealer Rights, a group representing rejected Chrysler and General Motors Co. showrooms, said today's announcement may help burnish Chrysler's battered image.
"This is an opportunity for Chrysler to earn back a modicum of good will they have lost in the eyes of the buying public," said Ohio dealer Alan Spitzer.
A dealer lawyer, meanwhile, said Chrysler's moves don't go far enough.
"The public is shunning Chrysler as it sees too many boarded-up dealerships," said Leonard Bellavia of Mineola, N.Y. "Reinstatement should be less of a legal maneuver and more of an acknowledgment that rejection was a bad marketing decision."
Bellavia, whose firm has three dozen clients in arbitration, also called on Chrysler to offer cash settlements to arbitrating dealers in markets where a franchise has already been assigned to another showroom.
Earlier this month, GM said it plans to reinstate 661 of its 1,160 rejected dealerships that have filed for arbitration.
GM has mailed nearly all of its letters of intent, which list requirements that dealers are expected to meet -- including facility size, location, capital and floorplan financing.
GM is giving dealers 10 days to sign and mail them, and then 60 days to provide documentation.
Under a new federal law, arbitrations must be completed by June 14, though they can be extended a month at an arbitrator's discretion.