Chrysler cuts ties with several Tenn. dealers - WKRN News 2

Chrysler cuts ties with several Tenn. dealers

Posted: Updated: May 14, 2009 03:08 PM CDT

NASHVILLE, Tenn. - Chrysler notified more than a dozen dealers across Tennessee that their franchise agreements could be terminated, including one in Nashville and one in Murfreesboro.

The automaker, who filed for Chapter 11 bankruptcy protection on April 30, called for the elimination of 789 of its 3,200 U.S. dealerships in additional papers filed Thursday.

The number represents a quarter of Chrysler dealers nationwide.

Dealers received letters via UPS Thursday morning, telling them whether they'd remain or be eliminated.

The following Tennessee dealers will have their Chrysler franchise eliminated:

  • Southeast Automotive, Nolensville Road, Nashville
  • Southeast Signature Motors, NW Broad Street, Murfreesboro
  • Prebul Jeep, Chattanooga
  • Grayson Pontiac, Knoxville
  • Harry Lane Chrysler Plymouth, Knoxville
  • Burgin Dodge, Knoxville
  • Clay Dillahunty's Tri-City Motor Co., McKenzie
  • Sexton Chrysler Jeep, Harriman
  • Delmar Haynes Pontiac GMC, Alcoa
  • Alley's of Kingsport, Kingsport
  • Don Hill Pontiac, Kingsport
  • Graves Pontiac Chevrolet Buick, Milan
  • United Chrysler Dodge, Dyersburg

Southeast Signature Motors in Murfreesboro also sells Hyundai and Volkswagen and will remain open selling those brands.  A spokesperson said only the Chrysler division will be eliminated.

Southeast Automotive in Nashville told News 2 the franchise termination does not necessarily mean the business will close.

General Manager Joey Huffines said the dealership has approximately 55 employees and there are no immediate plans to cut jobs.

"We're going to be here selling cars, we've got plenty of them to sell," he told News 2.  "We still [have to] sell them.  They're not [going to] come take them back."

Southeast Automotive will weigh its options and may sell used vehicles exclusively, after it moves its current fleet of new Chrysler, Jeep and Dodge cars.

Huffines said he is not sure why Chrysler selected his dealership.

"No one, at this point, at this level, knows the criteria [Chrysler] used to make their determination," he told News 2.  "Obviously we're bigger than a lot of [dealers] who aren't on the list and we are a five-star dealer and we've been a Chrysler dealer for 20-some years, so I don't know, I don't think anybody knows."

In Thursday's motion, Chrysler said it wants to cut ties with the 789 dealers by June 9.

The automaker said many of the dealers' sales are too low, adding that half of the nation's dealers account for 90% of the company's U.S. sales.

According to an ABC News report, the dealers will not have an opportunity to appeal the company's decision.

Chrysler spokeswoman Kathy Graham would not comment other than to say the company will notify dealers before speaking publicly.

A hearing is scheduled for June 3 in U.S. Bankruptcy Court in New York to determine whether to approve Chrysler's motion.

Chrysler's sales this year are down 46% compared with the first four months of last year and it reported a $16.8 billion net loss for 2008.

The company has received $4 billion in federal loans.

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