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Chrysler: Rural Customers Will Still Have Dealers Close By

UPDATED at 2:26 p.m.

Chrysler president Jim Press testified moments ago before the House Energy committee that, even after he closes 768 dealerships, Chrysler owners who live in rural areas will have to drive only .94 miles to reach another Chrysler dealer.

Committee chairman Rep. Bart Stupak (D-Mich.) isn't buying it.

General Motors chief executive Fritz Henderson acknowledge that some of his rural areas will be underserved after he closes all the dealerships he wants to and is willing to place new dealerships into rural areas if needed.

The truth of the matter is, some rural areas will get new GM and Chrysler dealers, and better ones. The two automakers are closing dealerships in rural areas not just because they didn't have as many customers living nearby as dealerships in metro areas, but because those dealerships that are there now are poorly run or poorly configured, i.e., they sell only one Chrysler brand, not all three.

The four-hour hearing became so emotional that tissues were placed on the table in front of the owners of dealerships that are being shut down. Several teared up as they testified.

One dealer evoked the spirit of his dead father, a World War II veteran, who, thank God, was not still alive to see what this country that he defended is doing to his son's car dealership.

Chrysler: Average Closed Dealership Lost $73,000 Last Year

11:18 a.m.: The average 2008 loss of the 789 dealers shut down by Chrysler during its bankruptcy was $73,000, Chrysler President Jim Press testified moments ago before the House Energy Committee.

Press, GM chief executive Fritz Henderson and several disgruntled dealers are testifying this morning before the panel.

Press defended the Chrysler shutdown by offering a dizzying ream of data:

  • 80 percent of the shuttered dealers did not meet their 2008 sales targets.
  • They cost Chrysler 55,000 vehicle sales.
  • 50 percent of them sold 100 or fewer cars in 2008.
  • 84 percent of them sell more used than new cars.

"While some of the 789 dealerships are profitable, they are making their money by selling used cars and other brands and they're a drag on the network," Press said.

Henderson just said that GM has granted 45 appeals of dealers that were supposed to be closed but will now remain open.

-- Frank Ahrens
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By Frank Ahrens  |  June 12, 2009; 2:26 PM ET
Categories:  The Ticker  | Tags: Chrysler, Fritz Henderson, GM, Jim Press  
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Next: June 15, 2009

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