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Home > Car Makers News > Chrysler > Chrysler plans road show to urge dealers to order vehicles | detnews.com | The Detroit News


Chrysler plans road show to urge dealers to order vehicles | detnews.com | The Detroit News


NEW ORLEANS -- Chrysler LLC plans a major sales push and cost-cutting campaign to strengthen its ability to survive ahead of a March 31 deadline to show the government it has a viable future, company executives told dealers Sunday.

Chrysler Vice Chairman and President Jim Press, along with other executives, urged dealers gathered at the National Automobile Dealers Association annual convention to order their normal allocations of vehicles for February and March -- despite a sales slump that is squeezing all automakers amid a recession that is keeping consumers out of showrooms.

Chrysler executives will launch a national road trip tomorrow in the New York City area to spread the message to dealers. The company also is arming retailers with incentives, including employee pricing, zero-percent financing and money that can be spent on advertising, to help spur sales.

In addition, the Auburn Hills automaker asked dealers to accept new cuts today. Chrysler will no longer reimburse them for filling up the gas tanks of new sold vehicles and has frozen the auto labor rate increase this year that is paid to retailers for performing warranty work.

"I think they understand the place we are in and understand the need for all parties to put some skin in the game," said Press, who received a standing ovation during the meeting with about 400 dealers.

Dealers talked of Press appearing in TV ads to push Chrysler vehicles, but he was noncommittal.

Chrysler needs 78,000 new U.S. car orders in February and is asking dealers to maintain the same level of inventory in March that they had in December, said Steven Landry, Chrysler's executive vice president of marketing and sales.

"We think that's fair," he told reporters.

Chrysler is operating with a $4 billion federal loan and must submit a restructuring plan to the government by Feb. 17 that outlines a path to long-term viability. The automaker must show it is making progress toward that goal by March 31 or could be forced to pay back the money, a move that would likely push the company into bankruptcy.

Chrysler has asked for another $3 billion in federal aid.

The automaker has not recorded any revenue since mid-December when it shut down all of its North American factories for a month to save money. Automakers book revenue when vehicles leave the factory so they need dealers to keep ordering even when plants aren't running.

Sales of Chrysler, Dodge and Jeep products plunged 53 percent last month, and 30 percent for all of last year. Overall, U.S. car and truck sales fell 18 percent in 2008 and 35.5 percent in December.

General Motors Corp. has received $9.4 billion in federal money and could get another $4 billion next month.

Several dealers said they left the Chrysler meeting feeling refreshed after months of worries.

Wesley Lutz, owner of Extreme Dodge/Hyundai in Jackson, went into Sunday's session prepared not to order any new vehicles this month but changed his mind after listening to Press.

Lutz now plans to place an order Tuesday even though he already has more than a 100-day supply of vehicles on his lot.

Press made a straight-forward pitch to convince Lutz to order more vehicles.

"He said 'Do you want the Kool-Aid or do you want reality?'" Lutz said after the meeting. "He promised us we'd still be open for business in April. That's pretty powerful."

Dealer Fred Frederick, who owns a Chrysler dealership in Laurel, Md., said he also would order new vehicles despite having a 60-day supply.

Frederick and other dealers said they would continue to fill the tanks of new cars sold at their stores even without Chrysler's help.

"You're not going to get an empty tank," Frederick said.

Ford Motor Co. and GM also are scheduled to meet with their dealers today at the convention, which comes amid an increase in dealership closures.

GM and Chrysler see consolidating or closing dealerships as a way to cut costs and ensure both can become viable companies.

Detroit's Big Three lost 988 dealerships last year but the firm Grant Thornton LLP says about 2,500 dealerships might close this year --or 10 percent of all new car and light truck dealers in the country.



[source]


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