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WASHINGTON - Chrysler Group prevailed in arbitration last week against two Texas dealerships, bringing the company's arbitration record to five victories and one defeat, Automotive News reported.
In Chrysler's win over Manuel Dodge, of Richardson, Texas, the arbitrator endorsed the company's Project Genesis strategy of trying to consolidate all brands under a single roof.
“Chrysler's new business model, and the existence of a high-volume, full-line dealership at this high-volume location, would bring more products to the surrounding community and to customers encountering the store at lower prices than would be available under Manuel Dodge's business model,” the arbitrator wrote, according to both a Chrysler spokesman and Manuel Dodge's attorney.
The arbitrator's May 12 decision continued: “Further, while Chrysler would have the authority to make Manuel Dodge a full-time dealer were it to be offered a letter of intent as a result of this proceeding, there is no indication that the dealership would be willing to change its sales style to more closely align its business model with Chrysler's preferred model going forward.”
A second Texas dealership, El Dorado Motors, of McKinney, also lost its bid for reinstatement last week, Chrysler said today.
The arbitrator's pro-Genesis reasoning in the Manuel Dodge case was similar to that used by another arbitrator in ruling against Joe Kidd Dodge of Cincinnati last month. Both dealerships had sold only Dodge vehicles.
Manuel Dodge's attorney, George Haratsis of Fort Worth, said the arbitrator's decision disregarded the intent of the December law that set up an arbitration process for rejected Chrysler and General Motors Co. dealerships seeking reinstatement.
“This completely ignores Congress' intent that a single-line dealer is eligible to be restored to Chrysler's dealer network,” Haratsis said. “If other arbitrators accept Chrysler's position, partial-line dealers will have little chance of success in arbitration.”
Neither Chrysler nor Manuel Dodge would release the text of the arbitrator's decision, citing confidentiality agreements.
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