WASHINGTON -- Two of the three Florida arbitration decisions this week hinged on whether the arbitrator thought that the rejected Chrysler Group dealership had a dual franchise that undercut its Chrysler sales.
In the case of Deland Dodge, which won its bid for reinstatement, the arbitrator viewed its nearby Kia dealership as separate and easily distinguished.
But in the case of Bob Taylor Jeep in Naples, which lost, the arbitrator saw its adjacent Chevrolet store as closely related.
The attorney for all three dealerships, Mark Ornstein of Orlando, declined to release copies of the decisions involving Deland Dodge, Bob Taylor Jeep and Venice Dodge, which also lost.
But he read from the judgments by the arbitrator, retired Florida state judge Amy Dean, stemming from the joint April 20-23 hearing for the dealerships.
“The evidence, however, does not support the termination based on the criteria used to reach this conclusion,” the arbitrator wrote, according to Ornstein. “Deland has two facilities, one for previously owned Dodge dealership and one for Kia. They are separate and there can be no confusion between the two.”
The judge continued: “While it is true that the principals of Deland own another car brand dealership, it is equally true that this was not an obstacle to earlier talks to be the Chrysler dealership in the area and should not be so now.”
In 2008, Chrysler had spoken with Deland Dodge about possibly taking on all of the company's brands, knowing that the dealership also had a Kia store, said Ornstein, himself a former dealer.
The Genesis impact
Deland Dodge won its bid for reinstatement even though its rival a half-mile away, Hurley Chrysler-Jeep-Dodge, is a Genesis dealership with all four brands -- including the new Ram truck brand -- under one roof, the lawyer said.
Last week, in the first arbitration decision of hundreds to come, Joe Kidd Dodge of Cincinnati lost its reinstatement bid in large part because the arbitrator affirmed Chrysler's Genesis strategy.
In a statement released yesterday, Chrysler said it “believes it is inappropriate to arbitrate these cases or analyze the decisions of the arbitrators in the media.”
The company said it “is comfortable with the scope of the arbitration process and believes it will confirm the sound business decisions made during bankruptcy. The process to determine which dealership agreements were rejected evaluated dealer performance and market factors using data-driven criteria and was applied to every dealer.”
'Not a good partner'
In the case of Bob Taylor Jeep, the dealership is next to the dealer's Chevrolet store.
“It is clear that the dealership is not a good partner for Chrysler going forward,” the arbitrator wrote, according to Ornstein. “The physical site is outdated, and though the dealership suggests it is prepared to rebuild its Jeep facility, the property is so closely related to its Chevrolet dealership that even the plans for construction call it the Bob Taylor Chevrolet Property.”
In the Venice Dodge case, key factors for the arbitrator included the dealership's sales performance and the age of its showroom, Ornstein said.
“The dealership has been consistently below its sales requirements [and] has an outdated facility,” the arbitrator wrote.
Venice Dodge's minimum sales responsibility scores were less than 100 percent, but the dealership consistently sold more Dodges than its rival sold Jeeps, Ornstein said.
In addition, Venice Dodge's showroom was built in the early 1990s, while its competitor's was built in the last decade and had a new fascia, he said.