Dealers may be next to face Chrysler cuts

With a cost-saving UAW contract and deeper workforce reductions planned, Chrysler LLC is moving on to another step in its strategy to streamline: working on reducing the number of dealers around the country and sharpening its brand image.

"We are openly talking with our dealers to get their buy-in and their opinion," Chrysler spokesman Jason Vines said Saturday, adding: "We're having discussions on a variety of areas with our dealer body." A report circulated Friday said one plan being discussed could eliminate as many as 1,000 of Chrysler's 3,700 dealerships as the company streamlines which vehicles are sold under its three brands. Chrysler disputed the report, which caught some dealers by surprise Saturday.

Vines stressed that no decisions had been made and no time line set.

"Sure, all of the dealer body would like to get down smaller, but there is no way on God's green earth to get down to that number," Vines said.

Chrysler, like other Detroit automakers, has been working for years to reduce the number of independently owned dealerships that sell its Chrysler, Dodge and Jeep brand vehicles.

It's a thorny issue. Too many dealers can lead to inefficiencies and competition among themselves for sales as U.S. automakers' market share declines, but eliminating a dealership is difficult with state franchise laws giving dealers great power to resist. More at Detroit Free Press