Posted by Ellen Krafve - email
LUFKIN, TX (KTRE) - Chrysler LLC has told a bankruptcy court it plans to sever ties with 789 of its dealers - or about 25 percent of them - across the country as part of its restructuring process. In their bankruptcy filing, Chrysler is asking for court approval to cancel their dealership agreement with the 789 dealerships.
The move could have a devastating impact on cities across the U.S., costing jobs and tax revenue.
According to Chrysler's legal filings, several East Texas dealerships will most likely be affected by the proposal:
Canton Motors - Canton, TX
Dewey Moore Ford Chrysler - Hughes Springs
Jack of Diamond L-M - Longview, TX
Mike Pile Motors - Tyler, TX
San Augustine Motors - San Augustine, TX
Snow Motors LLC - Palestine, TX
Wayne Williams Motors - Crockett, TX
Even if Chrysler no longer provides their product to these dealerships, that does not mean the car dealers will close their doors. They may just sell a different product. Also, the dealers likely will have a right to appeal to get off the list.
Chrysler does plan to continue its relationship with dealerships in Lufkin, Nacogdoches, Alto and Center.
The automaker has about 3,200 dealers but says that's too many.
It wants to have stronger, more profitable dealers with better facilities.
Chrysler spokeswoman Kathy Graham says the company will notify specific dealers before commenting publicly.
To read Chrysler's Chapter 11 proceedings, click here.