National Auto Dealers Say Chrysler Bankruptcy Should Not Be Used to Cut Dealer Network


WASHINGTON (April 30, 2009) - The following is a statement from the Chairman of the National Automobile Dealers Association (NADA), John McEleney, in response to the Chrysler bankruptcy:

"Bankruptcy is not the preferred option, but we have every expectation that Chrysler and its dealers will emerge stronger and more competitive than ever. We're pleased to hear of the announced merger with Fiat which should help speed up Chrysler's restructure.

"It's important to point out that Chrysler will continue to honor all warranties and that Chrysler dealers will work with all parties concerned and, most importantly, will make sure that their customers are taken care of.

"Bankruptcy, however, must not be used to drastically reduce dealer numbers. Dealers generate more than 90 percent of manufacturer revenue and are not a cost to the automaker. A rapid reduction in dealer numbers would not only do absolutely nothing to improve Chrysler's viability in the short term, but it would actually work against Chrysler's stated objective to increase revenue and cut costs.

"Chrysler's bankruptcy is especially disappointing. Like so many others, we were hopeful that all of the stakeholders would be able to reach agreement, and Chrysler's restructuring could move forward out of court. The key now is to get in and get out of bankruptcy as quickly as possible.  Since NADA represents all dealers - both domestic and international - our concern is to minimize disruption to the entire auto industry. In other words, the shorter the bankruptcy, the better for the entire industry - both domestic and international."

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