As part of the bankruptcy filing and the restructuring under the guidance of the federal government, Chrysler acknowledged in court filings that it will shrink the number of dealers it now carries. The company expects to eliminate about 800 dealers shrinking its network to about 2400 stores. Additionally, the court documents filed earlier this week stated that Chrysler did not expect to reimburse some of its dealers for price discounts and other sales incentives that were given to customers. However, since the filing of the court documents, Chrysler asked and received permission from the court to pay $753 million to dealers for the incentives. But Chrysler expects to only pay dealers it intends to keep in its sales network once it exits bankruptcy.

General Motors has also indicated that it will soon select about 2600 dealers to be eliminated from its dealer base of more than 6000 stores.

Jeffrey Herrick