The Detroit News
Chrysler Group LLC's letters of intent to reinstate franchises -- sent to 50 dealers -- include conditions that dealers described Wednesday as onerous and ridiculous.
A copy of the letter, obtained by The Detroit News, is a laundry list of conditions and means for Chrysler to terminate any reinstatement offers.
"These so-called 'letters of intent' are absolutely ridiculous. This is the same nonsense they pulled throughout months of our negotiations to find a non-legislative solution to restoring dealers," said Tammy Darvish, owner of Chrysler and other brand dealerships in Silver Spring, Md.
A company spokeswoman described it as a standard letter of intent.
"Chrysler Group is speaking with the dealers involved; we have not released any additional information at this point in time," the automaker said in a statement.
Chrysler terminated 789 dealers last June, and since then 36 have been reinstated. An additional 50 started receiving letters this week that would allow them to pursue reopening their franchises.
Among Chrysler's stipulations outlined in the letter: Should "anyone file a protest or lawsuit, demand arbitration or otherwise challenge" the proposed reinstatement, or if the matter is not dismissed or resolved within 30 days, Chrysler can unilaterally stop the reinstatement.
If there is no challenge, the dealer to be reinstated will be notified and has 90 days to submit architectural plans that meet specifications that include arches as part of the exterior, and use specified materials.
The dealership also must also have customer lounges consistent with the vehicle brand, plus covered service drive-in areas, a children's play area, refreshment section, Mopar accessory display area and specific signs.
Once the plans are deemed acceptable, the dealer has 90 days to begin construction.
There are financial requirements to cover inventory as well as working capital, and reinstated dealers must enter into a minimum five-year lease.
During those five years, the dealer cannot protest or challenge any Chrysler decisions to put another dealer in the vicinity.
Dealer responses must be completed and returned within 10 days, and those who accept must withdraw their arbitration demand they have filed with the American Arbitration Association. In December, Congress mandated arbitration for Chrysler and General Motors Co. dealers who were terminated by the automakers as part of their respective bankruptcy restructuring.
Chrysler dealers have 60 days to file a site proposal. If Chrysler doesn't approve it within 30 days, it is deemed automatically rejected.
The letter of intent expires in 90 days if the facility the dealer plans to use meets Chrysler's conditions; it expires in eight months if renovations are necessary and in 18 months if the dealer is building a new facility.
Failure to meet any deadlines can result in termination of the offer in the letter.
"They have zero intention of being decent about this," Darvish said.
Jack Fitzgerald, who has dealerships in Maryland and Pennsylvania and is a leader of the lobby group Committee to Restore Dealer Rights, agreed.
"Chrysler is not dealing in good faith," he said.
Neither Darvish nor Fitzgerald has received a reinstatement offer.
GM sent letters of reinstatement to about 660 of its 2,000 terminated dealers. The GM letters were standard and reasonable in their terms, said Mike Charapp, a partner with Charapp & Weiss LLP in McLean, Wash., who represents dealers who have been terminated by both automakers.
"I have not seen that detail in a letter of intent before," Fitzgerald said of the Chrysler terms.
Chrysler said last week it also is seeking to resolve disputes with other dealers -- those who aren't being offered reinstatement -- outside of arbitration.
About 400 disenfranchised Chrysler dealers filed for arbitration, a process that must be wrapped up in June.
A copy of the letter, obtained by The Detroit News, is a laundry list of conditions and means for Chrysler to terminate any reinstatement offers.
"These so-called 'letters of intent' are absolutely ridiculous. This is the same nonsense they pulled throughout months of our negotiations to find a non-legislative solution to restoring dealers," said Tammy Darvish, owner of Chrysler and other brand dealerships in Silver Spring, Md.
A company spokeswoman described it as a standard letter of intent.
"Chrysler Group is speaking with the dealers involved; we have not released any additional information at this point in time," the automaker said in a statement.
Chrysler terminated 789 dealers last June, and since then 36 have been reinstated. An additional 50 started receiving letters this week that would allow them to pursue reopening their franchises.
Among Chrysler's stipulations outlined in the letter: Should "anyone file a protest or lawsuit, demand arbitration or otherwise challenge" the proposed reinstatement, or if the matter is not dismissed or resolved within 30 days, Chrysler can unilaterally stop the reinstatement.
If there is no challenge, the dealer to be reinstated will be notified and has 90 days to submit architectural plans that meet specifications that include arches as part of the exterior, and use specified materials.
The dealership also must also have customer lounges consistent with the vehicle brand, plus covered service drive-in areas, a children's play area, refreshment section, Mopar accessory display area and specific signs.
Once the plans are deemed acceptable, the dealer has 90 days to begin construction.
There are financial requirements to cover inventory as well as working capital, and reinstated dealers must enter into a minimum five-year lease.
During those five years, the dealer cannot protest or challenge any Chrysler decisions to put another dealer in the vicinity.
Dealer responses must be completed and returned within 10 days, and those who accept must withdraw their arbitration demand they have filed with the American Arbitration Association. In December, Congress mandated arbitration for Chrysler and General Motors Co. dealers who were terminated by the automakers as part of their respective bankruptcy restructuring.
Chrysler dealers have 60 days to file a site proposal. If Chrysler doesn't approve it within 30 days, it is deemed automatically rejected.
The letter of intent expires in 90 days if the facility the dealer plans to use meets Chrysler's conditions; it expires in eight months if renovations are necessary and in 18 months if the dealer is building a new facility.
Failure to meet any deadlines can result in termination of the offer in the letter.
"They have zero intention of being decent about this," Darvish said.
Jack Fitzgerald, who has dealerships in Maryland and Pennsylvania and is a leader of the lobby group Committee to Restore Dealer Rights, agreed.
"Chrysler is not dealing in good faith," he said.
Neither Darvish nor Fitzgerald has received a reinstatement offer.
GM sent letters of reinstatement to about 660 of its 2,000 terminated dealers. The GM letters were standard and reasonable in their terms, said Mike Charapp, a partner with Charapp & Weiss LLP in McLean, Wash., who represents dealers who have been terminated by both automakers.
"I have not seen that detail in a letter of intent before," Fitzgerald said of the Chrysler terms.
Chrysler said last week it also is seeking to resolve disputes with other dealers -- those who aren't being offered reinstatement -- outside of arbitration.
About 400 disenfranchised Chrysler dealers filed for arbitration, a process that must be wrapped up in June.
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