Chrysler Offers to Reinstate 86 Closed Dealerships

Chrysler Group LLC is offering to reinstate 86 of the 789 dealers it shut down last year, the automaker confirmed Friday. But how many actually resume business will depend on the terms, some dealers say. Chrysler said "letters of intent" are being sent to 50 dealers who are appealing their terminations under a federal arbitration law, and who are in locations that need dealerships, The Detroit News reported. The company previously notified 36 dealers whose franchises were eliminated last summer, offering to let them reopen if they meet certain requirements. All of those discussions have led to contracts. The latest batch of 50 letters went to dealers among the roughly 400 that applied for arbitration to reverse their closings. Many of the 36 dealers who already received letters, however, did not seek arbitration: Some agreements were reached before a law was enacted in December that gave dealers a route to appeal. Recruitment in that group began shortly after Chrysler closed a quarter of its dealers in June as part of its restructuring while under bankruptcy protection. The big question is what demands Chrysler has placed on the revival candidates, beyond the normal requirements: location, facilities and financing for inventory and working capital. Those conditions weren't immediately known Friday. One stickler could be what is known as site control, where Chrysler can veto a dealer's sale of property for 30 years. That tactic would prevent a dealer from selling to a competitor, for example, said Tammy Darvish, a Chrysler dealer in Silver Spring, Md., and leader of the lobby group Committee to Restore Dealer Rights.