Friday, May 15, 2009

Chrysler Seeks To Slash 789 Dealerships

In a bankruptcy court filing yesterday, Chrysler stated that it wants to eliminate 789 of its approximately 3,200 U.S. dealerships by early June.

Closing the dealerships is designed to help Chrysler in its bankruptcy restructuring process.

The impact on state and local economies could be significant. For example, in Utah, car sales generate a large amount of tax revenue. KSL reports that the tax revenue from car sales typically ranks among the top three revenue sources for the state. At the local level, the loss of dealerships means the loss of jobs, and the loss of those salaries being spent in the local economy.

10 dealerships are targetted to be closed in Utah. They are in Spanish Fork, 2 in Ogden, Treemonton, Layton, 3 in Cedar City, Nephi, and St. George.

As this post was being written, GM announced that it plans to end contracts with 1,100 dealerships. Details will be posted when available.

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