Attorneys for closed Chrysler dealerships are accusing Chrysler of already violating the new law set in place for the arbitration process. The law was signed by President Obama last month, and called for Chrysler to notify each dealer with an explanation for their closure by January 15.
Chrysler has immediately denied any breach of law in regards to the failure to send notices, but this has not slowed attorneys representing 65 rejected dealers who say they fully intend to address this issue in each arbitration case. The attorneys are going to argue that Chrysler showed bad faith in written communications to the dealers, according to Automotive News.
“We’re going to make an issue of this early on and explain that they’re not in compliance with the law,” said Mike Charapp, legal consultant for approximately 24 rejected dealers.
“There are consequences to that. We’ll have to ask the arbitrators to decide what the consequences are,” said Charapp.
Chrysler says that it sent a four-page letter, as well as an e-mail to all 789 of its closed dealers in an effort to comply with the law. Chrysler says that each letter consisted of a four-page form letter that listed criterion used to rejects dealers on a general basis, as opposed to listing the specific criterion on a case-by-case basis.
According to Automotive News, which obtained a copy of the letter, it consisted of 22 criterion including sales volume, market share, customer service, among others. There was also a scorecard based on 13 factors to determine a percentage-based score for each dealer, but Chrysler failed to disclose what scores qualified as passing or failing.
“The legislation requires the company provide the criteria used in rejecting the dealership’s dealer agreement,” Chrysler said in a statement. “We did that.”
Chrysler not only believes that it complied with the law, but it also believes that it went above and beyond the required steps in their communications with the dealers.
“Not only did the company [Chrysler] comply with the requirements of the legislation, we exceeded them. The information shared with the affected dealers is the specific criteria used in deciding which dealer agreements were rejected as well as the individual dealer’s data. A narrative was not required.”
