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Cars Blog

Backseat Driver: What was Chrysler thinking?

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June 3, 2009 11:20 am
By Peter C. T. Elsworth

While a bankruptcy judge is expected to hear arguments Thursday on Chrysler's plan to terminate 789 dealerships, senators in Washington are questioning Chrysler and General Motors about their respective plans to shutter dealerships nationwide.

It is no secret that the U.S. auto companies have been seeking to streamline their marketing network by reducing the overall number of dealerships and consolidating their franchises under one roof on busier roads.

The bankruptcy of both companies has apparently given them the internal go-ahead to switch the program to fast forward.

But the dealerships are fighting back, claiming they do not cost the automakers anything and reducing their number will merely reduce sales potential.

Both sides have a point. But the rub comes when you consider the different ways that Chrysler and GM have approached the issue.

Chrysler told its dealerships it planned to close them in three weeks - which means next week - while GM told some 1,100 dealers it would not be renewing their franchises late next year.

Forget about the merits of closing dealerships, one way or another. Instead, just consider the sheer inhumanity of giving 789 dealerships and their employees just three weeks to wrap up their entire working lives.

Many, like Rhode Island's Jeep Tarbox, are third generation companies which have loyally served the Chrysler brand through thick and thin, which have loyally served their communities through their support of kids' baseball teams and other good causes, which loyally have supported their employees and their families.

Now told to close up in three weeks!

I can only assume that this was one of the final acts of former chairman Bob Nardelli who is infamous for his heavy handed management style.

Indeed, portfolio.com recently ranked him 17th on its list of the 20 worst CEOs ever. Roger Smith, who ran GM from 1981 to 1990, was ranked 13th.

So hopefully, some humanity will prevail in Washington and Chrysler's dealers at least given the same amount of time as the GM dealers to convince Chrysler to keep them, adapt their businesses or close up.

- Peter C.T. Elsworth

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