GM, Chrysler Dealer Cases Differ

The first arbitration cases of terminated Chrysler and General Motors dealers are to begin next month, but the automakers are following starkly contrasting strategies to resolve the disputes, reported the Detroit Free Press.

Both companies reduced their dealer networks as part of their government-backed bankruptcy restructurings last year. But late last year, Congress passed and President Barack Obama signed legislation allowing the rejected dealers to challenge the decisions through arbitration.

Chrysler is moving aggressively, hiring high-powered national law firms, and it is not backing down from its plan to shrink its retail network by 25 percent or 789 dealers. Slightly less than 400 of those are pursuing arbitration to regain their Chrysler, Jeep or Dodge franchises, said Chrysler spokeswoman Kathy Graham.

Using a more conciliatory approach, GM sent letters offering to reinstate 661 of 1,160 dealers who filed for arbitration after GM initially decided to wind down their businesses. Those who want to keep their showrooms open have 60 days to meet conditions and pass a credit audit by GMAC.

But GM is continuing to talk with the 500 dealers that it didn't offer to reinstate and is open to some financial settlement in exchange for relinquishing their appeals.

"We want to get this behind us and get back to what we do best -- selling cars and taking care of customers," said GM spokeswoman Ryndee Carney.

Chrysler is convinced its turnaround requires a smaller dealer network.