Chrysler plans to cut nearly 800 dealers

Chrysler LLC plans to eliminate 789 dealerships, or about 25 percent of its dealers, including eight in the St. Louis area.

Privately-held Chrysler asked a New York bankruptcy court Thursday to reject dealer agreements as part of its Chapter 11 reorganization, which it filedin April.

The St. Louis-area dealers on the elimination list in the filing are:

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??? Auffenberg Chrysler in O'Fallon, Ill.

??? Chris Auffenberg Jeep in Washington, Mo.

??? Century Motor Corp. (Century Dodge Chrysler Jeep) in Wentzville, Mo.

??? Dave Croft Motors in Collinsville, Ill.

??? Reuther Dodge and Reuther Jeep-Chrysler in Creve Coeur, Mo.

??? Roberts Motors in Alton, Ill.

??? Sam Ogle Chrysler Jeep in Crystal City, Mo.

??? Lucas-Smith Automotive in Potosi

Clickhereto download a PDF of the entire list.

Rejected dealers will have until May 26 to file objections to Chrysler's action.

Roberts Motors in Alton has retained a law firm to challenge the rejection, said John Roberts, general manager and son of owner Samuel Roberts. John Roberts said he doesn???t know if or how many other dealers will go along with a proposed court fight. ???It???s uncharted territory, we don???t know what???s going to happen. But we won???t go down without a fight.???

Roberts said that in looking at the list of dealers targeted for elimination, he doesn???t think the criteria was performance. ???I think it has more to do with locality and franchises,??? he said. ???We always sell over 200 percent of the minimum sales criteria, so what criteria was used, I have no idea.???

In addition to selling Chrysler and Jeep products, Roberts Motors has a Ford franchise. ???We sell a lot (of Fords), so I don???t foresee any necessity to lay off anybody at this point,??? Roberts said. He said the dealership currently employs about 40 to 45 people. ???There are a lot of good dealerships on the list, and I feel sorry for them,??? he said.

As to what will happen with the franchises targeted for rejection? ???(They) will no longer get new Chrysler vehicles, and it???s my understanding that Chrysler will not purchase vehicles and or existing inventory,??? Roberts said. ???It is our responsibility to get them sold by June 9. We are authorized to still sell and service through June 9. We can do maintenance work after that, but no warranty work.???

In a court filing, Chrysler says that its domestic dealer network peaked at about 6,500 dealers in the mid-1960s. Just over 50 percent of its current dealer network of 3,181 accounts for 90 percent of the company???s domestic sales. About 25 percent of Chrysler???s current dealers account for about 50 percent of its U.S. sales, according to the filing. The 789 dealers targeted for rejection represent 14 percent of Chrysler's sales volume.

While Chrysler said it has been working to ???rationalize??? its network for a number of years, a key component of its reorganization partnership with Italy???s Fiat SpA calls for the transfer of a ???strong, well-positioned dealer network,??? according to the court filing.

Chrysler???s restructuring plan also calls for closing eight plants, including Chrysler???s two plants in Fenton, Mo.

Chrysler???s South plant in Fenton, which assembles minivans, was idled at the end of October. Chrysler???s North plant, which makes Dodge Ram trucks, was idled earlier this month for one to two months and has beenslated for closurein the third quarter.

The plants had employed 1,200 workers in Fenton, down from 5,000 several years ago.