Bankruptcy Court Approves Chrysler's Rejection of Certain Dealer Contracts

AUBURN HILLS - MI June 9, 2009: The following statement can be attributed to Jim Press, Vice Chairman & President, Chrysler LLC or the company:

“We are pleased with the Judge’s decision allowing us to go forward with the realignment of our dealer network. A financially strong, competitive dealership network can increase sales and afford to invest in facilities, in people, in training, and in amenities, with a major focus placed on customer satisfaction. The 2,392 U.S. dealers that will move forward will be integral to the success of the new Chrysler.

“The decision about which of the 3,181 dealers would be brought forward to the new company was gut wrenching, but it was an absolutely essential part of our effort to assure the long-term viability of the new Chrysler Group. The goal of the sale of our assets to a new company is to position Chrysler to move forward as a strong, financially sound automotive company serving our customers with a broader and more competitive lineup of environmentally friendly, fuel-efficient, high-quality vehicles, and an equally high level of customer service through an efficient dealer network. “The 789 affected dealers represent about 25 percent of the company’s dealer network and about 14 percent of total sales. We have communicated to these dealers that we will redistribute 100 percent of the eligible inventory. Discontinuing these dealerships will save the company about $1.4 billion over 4 years in product engineering and development costs for 'sister vehicles,' $150 million annually in marketing and advertising costs, and $33 million annually in administrative costs.

"The 2,392 Chrysler Jeep and Dodge dealers moving forward with the new Chrysler are poised and ready to take care of customer sales, warranty, service and parts requirements."