Chrysler LLC to close 789 dearlerships

Chrysler LLC told a bankruptcy court that they plan to eliminate 789 dealerships, or about 25 percent of them throughout the U.S. as part of its restructuring process.

A spokesperson for the company said they plan to notify specific dealers before commenting publicly, but said they need to close the franchises in order to have stronger and more profitable dealers with better facilities.

The company, which has 3,200 franchises, received $4 billion in government loans and filed Chapter 11, bankruptcy protection, on April 30, and asked a judge to approve the sale of all its assets to a new Chrysler controlled by Italy’s Fiat Group SpA.

The dealers who are scheduled to lose their franchise, will have a right to appeal to get off the list, in addition, they formed a committee and have hired lawyers and are asking Chrysler dealers to contribute $4,000 each to a legal fund.