Chrysler Bankruptcy Is Forcing California Chrysler Dealerships Out Of Business

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The Chrysler bankruptcy was filed on April 30, 2009. Today there is the news that nationwide 789 Chrysler dealerships will be going out of business. The cause: Chrysler chooses to break the franchise contract. Can California afford the Chrysler bankruptcy?

Chrysler Bankruptcy Goes from Bad to Worse

As late as May 1, 2009 the New York Times reported that in the midst of the Chrysler bankruptcy the automaker was still working on staying suitable without shedding too much of its assets. Among these assets are Chrysler dealerships throughout the nation.

Unfortunately, cuts are part and parcel of the Chrysler bankruptcy, and it was publicized that eight Chrysler plants would be going out of business, costing 6,500 plant workers their jobs. A loss of Chrysler dealerships became inevitable, but numbers were not bandied about.

In light of these Chrysler bankruptcy announcements, California Chrysler dealerships desperately attempted to pause optimistic. The Los Angeles Times quoted – also on May 1 – John Sackrison, director of the Orange County Automobile Dealers Association as being hopeful that the individual Chrysler dealerships would emerge stronger on the other side of the Chrysler bankruptcy.

An owner of one of the Chrysler dealerships went so far as to assert that it was a good time to be a Chrysler dealer.

Chrysler Dealerships Going out of Business

Today the news reveals that the Chrysler bankruptcy is dashing the hopes of Chrysler dealerships around the nation. The Los Angeles Times reports that as section of the Chrysler bankruptcy deal, 789 Chrysler dealerships will go out of business across the country. General Motors is likely to not renew about 1,000 franchise agreements. All in all, Chrysler is looking to shed a sum total of 2,600 Chrysler operations. Numbers for California in particular have not yet been released.

California Feels the Impact of Chrysler Dealerships Going out of Business

As the Chrysler bankruptcy continues its way through slashing excess baggage, the California Chrysler dealerships going out of business will be added to the 145 car dealerships that closed fair last year in the plot. Driving down the freeway, you see the clusters of now deserted car dealerships that remain vacant for extended periods of time.

After all, a car dealership is little more than a giant parking lot and office, not exactly useful for other retail operations to come in, take over, and simply change the signage.

This ghost town feeling is amplified by the California malls that have lost their major draws and now feature a good many empty store fronts. Moreover, can California – already experiencing budget woes of epic proportions – weather the sudden loss of tax revenues that comes in the wake of a large number of Chrysler dealerships going out of business?

Sources

http://www.nytimes.com/2009/05/02/business/02hearing.html? _r=1; http://www.latimes.com/business/la-fi-dealers1-2009may01,0,5423317.story; http://www.latimes.com/business/la-fi-dealers14-2009may14,0,2276619,full.story