2 Fiat Chrysler dealerships, closed after years of bankruptcy litigation, are reopening
DETROIT -- Two suburban Detroit dealerships have been quietly re-entering the Fiat Chrysler Automobiles US network after more than six years away, now that the U.S. Supreme Court has ended a long legal battle over their reinstatement.
Colleen McDonald, president of Livonia Chrysler Jeep, said the dealership reopened about 2½ weeks ago and will host a formal grand opening in January. The location had operated for several years as Livonia Mitsubishi while the battle over her Chrysler dealer franchise license lingered in court. McDonald said the company has finished a remodeling and returned to flying the Chrysler flag earlier this month.
Also soon to reopen is Fox Hills Chrysler Jeep in Plymouth Township, which had fought alongside Livonia in litigation over the Chrysler dealer license terminations since 2010. The Fox Hills dealership owned James Schebil has been undergoing its own remodeling and is expected to reopen in January, Township Supervisor Shannon Price said.
Schebil could not be reached for comment on Tuesday.
“Every day it gets better. Our neighbors in the area and the city of Livonia have been incredibly welcoming, and have been telling us, ‘We’re so glad you’re back,’” McDonald said of reopening the Livonia dealership.
“It’s good to be working with (FCA) again as well. Before now we were only dealing with each other through attorneys. Now the attorneys are gone and we’re interacting again with the business office again and the company's been wonderful and very supportive. They just want to sell cars -- and so do we.”
Some 32 dealers, including five in Michigan, won reinstatement via a federal arbitration process in 2010, but various lawsuits dragged on for years over what those victories actually meant. Chrysler originally terminated 789 dealers as part of its 2009 bankruptcy reorganization, reducing its dealer count at the time to about 2,400.
Fiat Chrysler welcomed the returning dealers Tuesday.
Spokesman Michael Palese said in a statement that Livonia has satisfied the financial and operational requirements for the OEM’s standard letter of intent agreement with dealers -- and Fox Hills is expected to do so as well.
“(Fiat Chrysler) is pleased to add Livonia to our network, and expects to add Fox Hills in the near future, in accordance with applicable court rulings …,” Palese said. “Their satisfaction of the (letter of intent) requirements places the dealerships in a good position for success in the Detroit metro market.”
Fox Hills is now being renovated and will be reopening less than a mile away from Dick Scott Chrysler Dodge Jeep Ram.
Tom Celani, co-owner of Dick Scott, said he has not yet heard of an opening date for Fox Hills, but thinks the head-to-head competition could actually help both dealerships -- and customers.
“Nobody ever takes the first price they’re offered from any car dealer. A lot more people are going to come now for the chance to price cars at two Chrysler dealers within walking distance,” he said. “We’re going to be able to draw buyers from a lot farther away than we could have before this happened, and it presents an opportunity.”
A third dealership in the court case, Village Chrysler Jeep now doing business as Village Automotive Inc. in Royal Oak, is still in discussions with the automaker. It has letter of intent to return to the dealer network but has not met all of the requirements for a final agreement with Fiat Chrysler, Palese said.
The Supreme Court during the summer declined to hear Chrysler’s appeal in a 2010 federal dealership lawsuit from Detroit, which allowed a ruling in the dealers’ favor from the 6th Circuit U.S. Court of Appeals to stand.
The appeals court found that the federal law allowing the dealers to prevail in arbitration trumped state dealer franchise laws governing Michigan and other states. This meant competing dealers that have since opened within their former market radius could not block their return.
McDonald said all but one of the former Livonia Chrysler Jeep managers have returned to the revived dealership, and many of its employees are back as well. The dealership finished a remodeling and operates in a very different market today than it did before the arbitration, she said, so her company has been adapting.
'Don't give up'
“The learning curve on that can be enormous. We’ve always kept in touch with our customers and friends by going through Facebook and social media, but we’ll be doing a lot more,” she said.
She also said the road to regaining the dealership was a lesson in persistence.
“Don’t give up. We fought so hard to get here, and I’m just thanking God and my husband and family for being here through it, and we’re thankful that not giving up led to a good result,” she said.