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Miller Hill Subaru requests arbitration as Chrysler tries to block dealer reinstatements

The Chrysler & Jeep signs are now gone from the entrance to Miller Hill Subaru.
The Chrysler & Jeep signs are now gone from the entrance to Miller Hill Subaru.
Photo by John Forcier

Miller Hill Subaru is requesting arbitration along with hundreds of other former Chrysler, Dodge, Jeep, and General Motors dealers in an attempt to have their franchise agreements reinstated - but success is far from guaranteed.

It seems clear that Chrysler will not reinstate rejected dealers if they have their way. They are attempting to block implementation of laws in four states that make it easier for a dealer to regain a lost franchise and have also indicated that they may challenge the new law signed December 2009 allowing for arbitration.

They are also awarding new franchises in close proximity to recently closed ones. Chrysler terminates a dealer's franchise, without providing specific reasons why, and then awards a competitor in the same market the very same franchise. Example: Duluth Dodge is set to receive Chrysler - Jeep literally right across the street from Miller Hill Subaru.

Why would Chrysler close one franchise and then open another next door? Nationwide the manufacturer has been trying to put Chrysler, Dodge, and Jeep under one roof for years - all three brands at one dealership. The idea is to have a smaller dealer network, with each dealer making more money, but Chrysler has found it difficult to consolidate the brands, and could not force dealers to do so because of state franchise laws.

Chrysler's bankruptcy has now negated those laws and they are taking full advantage of their new legal status to reconfigure their dealer network.

The hopes of rejected dealers now lie in arbitration to be conducted by the American Arbitration Association. The process must be complete by June 14, 2010.

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