WASHINGTON -- Chrysler Group said it prevailed in three more arbitrations against dealerships, giving it an overall record of eight wins and one loss.
The dealerships that were unsuccessful in their bids for reinstatement were Hinckley Dodge in Ogden, Utah; Tenafly Chrysler Jeep in Tenafly, N.J.; and Midway Motors in Framingham, Mass.
Both Hinckley, which sold only Dodge, and Midway, which sold Chrysler and Jeep, competed with Project Genesis stores nearby, their owners said.
Genesis stores house all four Chrysler brands under one roof, and the company's goal is to convert its entire dealer network to Genesis dealerships by the end of 2011.
Chrysler said in a statement Friday that it “presented evidence during the arbitration hearings that demonstrated the company employed sound business judgment in restructuring its dealer network.”
The arbitrator in the Hinckley Dodge case gave great weight to Chrysler's Genesis strategy, according to a copy of his decision obtained by Automotive News.
“Chrysler will have the Ogden marketplace arranged in a way that more closely coincides with its plan to implement Genesis,” arbitrator Robert M. Anderson wrote in a May 17 decision.
Location, location, location
The new Genesis dealership owned by Larry Miller is located about two or three miles away from Hinckley Dodge, general manager Jim Hinckley said.
But the arbitrator said the Miller dealership has an advantage in that it is on or near busy highways, near other dealerships, and in an area with other retailers.
“The Miller location offered a superior area for Chrysler to have a Genesis dealership in terms of both demographic and geographic characteristics,” the decision said.
Hinckley, whose great grandfather founded the store in 1915, said Chrysler awarded a franchise to the Miller dealership after federal legislation creating the arbitration process was enacted last December.
“I felt that was underhanded,” he said.
The Tenafly case
In the Tenafly Chrysler Jeep case, Chrysler argued that it wanted to reduce 15 dealerships to six Genesis stores at optimal locations, the arbitrator said.
“The geographical locations that were selected are all in the midst of population centers where the manufacturer's demographic expert established there is demonstrated growth,” said the May 17 decision, a copy of which was obtained by Automotive News. “Tenafly is not one of those centers.”
Tenafly is a small, affluent New York City suburb located across the Hudson River from Manhattan.
The owner, Rob Engel, who had the store since 1987, described the arbitrator's and Chrysler's reasoning as “a very backward and primitive way of thinking.”
In the Midway Motors case, the arbitrator supported Chrysler's arguments that closure was justified by the nearby presence of a Genesis store, said Midway owner Nai Nan Ko.
The arbitrator also accepted Chrysler's criticism of Midway for selling Kia as well as Chrysler and Jeep cars, said the owner, who represented himself without a lawyer. Ko owned the store for 12 years.
Chrysler also has prevailed in arbitrations against dealerships in Ohio, Florida and Texas. The one case it lost involved a Florida dealership.
General Motors Co. has lost the two known arbitrations it has been involved with.