Chrysler dealers question franchise terminations

NEW YORK — A parade of Chrysler dealers slated to lose their franchises took the stand Thursday in the automaker's bankruptcy protection case, many of them touting their sales and service records over the years and questioning how they were chosen for termination.

Just under 20 dealers were sworn in at the beginning of what was expected to be a lengthy day of testimony from both dealers and Chrysler LLC executives. Arguments on the motion are scheduled for Tuesday.

It's not clear when U.S. Judge Arthur Gonzalez will rule on Chrysler's motion, or how this will effect Chrysler's plans to terminate the dealer franchises effective Tuesday.

James Tarbox broke down while testifying about learning that the franchises for his pair of dealerships in Rhode Island and Massachusetts were included on Chrysler's list of the 789 it plans to terminate.

"I thought there must be a mistake," he said choking back tears.

Though acknowledging that he posted a loss for 2008, Tarbox said his dealerships have won awards for both sales and service in recent years.

Auburn Hills, Mich.-based Chrysler claims that it needs to reduce its dealer base by about 25 percent to a leaner network of about 2,400 dealers in order to emerge from Chapter 11 bankruptcy protection as a stronger company.

But the dealers argue that they don't cost the automaker anything. They say that if Gonzalez approves Chrysler's motion it will result in the shuttering of hundreds of dealerships and thousands of workers will lose their jobs.

A group representing about 300 of the dealers have filed an objection. They also earlier opposed Chrysler's sale to Fiat, saying it was tied to the plan to eliminate the dealerships. Several attorneys for individual dealers also have filed objections.

Alan Spitzer of Medina, Ohio, an auto dealer since 1970, said he spent $3.5 million in 2003 on a new building to combine two of his Ohio Dodge dealerships under one roof.

The plan was to put Chrysler and Jeep dealerships eventually at the same location — a move in line with the automaker's stated goal of having all three of its brands located together at dealerships.

But all of Spitzer's Chrysler franchises, including others in Ohio and one in Florida, were included in Chrysler's list of those it plans to terminate. Spitzer also owns other dealership that sell a variety of other brands of vehicles.