Hundreds of Car Dealers Try to Get Their Dealerships Back

By Tom Krisher, Associated Press
January 22, 2010

Detroit (AP) – Michael Wolf is taking a big gamble that he can convince an arbitrator to give him back his Chrysler-Jeep dealership.

He’s among more than 900 car dealers nationwide who have signed up to appeal decisions by General Motors Co. or Chrysler Group LLC to revoke their franchise agreements and shut them down.

Wolf and his wife have owned Wolf Motor Car Co. for 22 years in Plymouth, Wis., halfway between Milwaukee and Green Bay. But inexplicably to him, his business was one of 789 nationwide that Chrysler forced to close last June while it was going through bankruptcy protection.

GM wants to close 2,000 dealers by October of this year, but 700 of those will remain open because the automaker allowed them to keep selling some of the company’s brands while taking away others.

Both companies say the closed dealers weren’t performing well, and they need to make the cuts to keep the remaining ones healthy so they can invest in better showrooms and more advertising to boost sales. Many dealers were in locations away from where customers now shop, work or live.

But the politically connected dealers said the companies unfairly took businesses that were in their families for generations, and they persuaded Congress to pass a law requiring binding arbitration. The American Arbitration Association, which will handle the hearings, says 32 percent of the closed dealers filed appeal paperwork by Friday afternoon. The rest have until midnight Monday to file.

When Chrysler took Wolf’s franchises in June, his family kept the dealership open by selling used cars and with its repair service. They joined a group of Wisconsin dealers who took Chrysler to federal court, saying that state law protected them from being severed from the company. The appeal is pending in New York.

Now, Wolf will spend anywhere from $25,000 to $75,000 on legal fees in an effort to get the franchises back…

…Chrysler CEO Sergio Marchionne has said the automaker may challenge the constitutionality of the arbitration law in federal court, but spokeswoman Kathy Graham said Friday that no decision has been made.

Graham said Chrysler already has had to hire people to handle the paperwork, and it likely will need teams of lawyers and company officials to attend multiple hearings on the same day in different states…

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