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"Chrysler Group's optimized dealer network is contributing to improved vehicle sales and customer service and will continue to be a vital part of the company's success," said Michael Palese, a Chrysler spokesman. He entered into arbitration with Chrysler in 2010. 5 million in parts between the warehouse and the two retail locations. "We cashed out our life insurance policies to sustain mortgage payments on both buildings," he says. Today, Mr. Jim Koehler, owner of Scotia Motors in Scotia, N. Koehler, 67, now runs a used-car sales and service shop with his wife and daughter, but he says the business is not profitable. "I hope we are all made whole," he says. Turns out the battle is not over just yet. Constitution when the car makers terminated franchise agreements while in bankruptcy restructuring. They are seeking compensatory damages ranging from $500,000 to more than $5 million apiece. The cases are believed to be the first to test the constitutionality of the federal government's $80 billion bailout of the auto industry under the Bush and Obama administrations. His case is seeking class-action status, and the plaintiff lawyers behind that case say they hope to include the claims of all Chrysler or GM dealerships that were hurt by the rejections. The plaintiffs say that the Obama administration violated what's known as the "takings" clause of the Fifth Amendment. The judge warned in February that "the theory under which plaintiffs hope to recover does not fit neatly" into a normal takings-clause case. Government lawyers are expected to argue that the U. Dave Smith, 58, president of Colonial Chevrolet Company Inc. , says that in May 2009, GM offered $7,950 to close operations within 18 months, prior to the bankruptcy and restructuring. He refused to sign the agreement and his dealership contract was subsequently terminated when GM filed for bankruptcy a month later. New car sales used to account for 65% of annual profits, with the rest coming from parts and repairs. , who is representing 125 former Chrysler dealers, aims to show that terminating the dealership contracts was "a condition of receiving funds" from Treasury. Franchises, such as the Chrysler and GM dealerships, generally don't face termination by a franchiser because they are protected by state laws. Federal bankruptcy law gives companies wide latitude to reject undesirable contracts. Rob Engel, 59, and his brother, Richard, grew up in their father's auto-repair shop. The Wyckoff location also had a wholesale parts warehouse. , and lost their franchises in 2009. Engel says, adding that he never found out why his locations were selected. Both locations were selected for termination in 2009 and the brothers had three weeks to sell all their vehicles and other inventory and close shop. Mr. government's involvement, loaning taxpayer money and overseeing GM and Chrysler's restructuring, perverted the natural course of bankruptcy. "We're not looking back," he added. Many who lost their franchises were able to sell new cars for other new-car makers, sell used cars, open muffler shops or rental car agencies. They claim they fell into debt when they lost profit from the vehicles and parts they had on their lots. , and a Chrysler dealership in Wyckoff, N. The company has since reduced that number to 4,407, of which 90% are profitable, a level the company hasn't seen in its dealers since the 1970s, he said. at the end of 2008, only 57% were profitable. Mr. , and a plaintiff in a Chrysler suit, said he lost about $2 million when his Dodge franchise, started by his father in 1946, was revoked. "This has been the three worst years of my life. |
Thursday 26 April 2012
Dealers Continue Fight
