Dealergate & Quality Chrysler: Owners May Get Their Dealership Back

General Motors and Chrysler unceremoniously dumped a large number of dealerships last year as a part of their bankrupcy proceedings. Indications of political influence in the selection of which dealers were to be cut off earned the process the name of Dealergate.

I was aware at the time of the numbers of dealers being cut — General Motors cut 1,350 dealerships and Chrysler cut 789 (some accounts said 900). And I knew that Chrysler Corporation cut off the dealers it was dumping on June 9, 2009 — as soon as allowed by the bankruptcy court decision and its review by the US Supreme Court — and Chrysler specified that the auto inventories were to be taken from those dealerships (with Chrysler billing the closing dealership for the "service") to dealerships Chrysler was allowing to remain open. What I hadn't known was that the General Motors dealerships were allowed to remain open until October 2010 to sell their inventories.

Belatedly, at least some of the dealers may be able to have some recourse. Late last year, Congress passed and President Obama signed a law requiring mandatory arbitration for dealers challenging their termination. One dealership that has requested arbitration, according to an article (subscription required) in the Albuquerque Journal, is Albuquerque's Quality Jeep Chrysler — the dealer I wrote about previously.

The DiLorenzo family owned the Quality dealership for 22 years. They have no idea why they were targeted for closure. Annette DiLorenzo Thayer, the dealership's former Director of Operations, described this as "a chance at getting 'a little bit of justice' ".

"We are ecstatic for the opportunity to find out why they would take something from us, steal something from us, and give it to someone else for free," she told the Journal.

The DiLorenzo family wants to get its brand back, and hopes for reinstatement. Chrysler is still considering "whether to challenge the appeals process."