Surviving Chrysler dealers’ dilemma

May 19, 2009

By Friday, surviving Chrysler dealers have to fill out a form and submit it to the bankruptcy court. The purpose of the form is to reflect any and all outstanding debts that the surviving dealers believe to be owed to them. In the last couple weeks, Chrysler has been making payments to their surviving dealers every Tuesday. The purpose of this form is apparently to put the new Chrysler-Fiat entity on notice as to any future claims against them by surviving dealers. The form was sent to dealers pre-populated with amounts of $000.00.

The dilemma facing these dealers who did not get a cancellation letter is what to do with this form. Apparently there have been a lot of side deals made in the past year regarding bonuses and spiffs to be paid in exchange for accepting vehicle allocation. Chrysler’s field people apparently played fast and loose with dealers to accomplish what they needed to get done. One dealer even reported to me that he was promised that Chrysler would not reopen a recently closed point if the dealer took 40 extra units. Every Chrysler dealer is now faced with the dilemma: formally ask for that which is owed or just forget about it. The fear among these dealers is that if they ask for their money, the company will reverse their decision and send that dealer a cancellation notice.

The dealers with whom I spoke all felt that they had between $30,000 – $80,000 owed to them on these so-called side deals. The consensus was that they would probably return their forms on Friday reflecting an amount owed of $000.00. Why take the risk of giving Chrysler a reason to say “see you later”? These dealers apparently feel so fortunate that they’re not willing to put themselves at risk by asking for what is owed.

What would you do?


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