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Dealer Consolidation

Old 02-08-2008, 08:47 AM
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Default Dealer Consolidation

The following was posted today in autoweek.com:

By BRADFORD WERNLE, AUTOMOTIVE NEWS

Chrysler rolled out a program this week aimed at solving two of its biggest problems: too many unprofitable dealerships in metro areas and too many duplicate, "badge engineered" products that compete with each other.

The program, called Project Genesis, succeeds Project Alpha, the company's previous dealer consolidation plan, which has put all three brands under one roof in hundreds of locations. Chrysler executives referred to Genesis as "Project Alpha on steroids."

"Genesis incorporates the whole company getting on the same alignment with the same overall strategy," said Chrysler co-President Jim Press in an interview Thursday. "The dealer network component is a piece of an overall plan."

Chrysler wants fewer and more profitable dealers that aren't so close to each other in urban areas. Nearly all of them will sell all three brands under one roof.

"To have the most profit and viability, you have to have all three brands under roof to get the full lineup of Chrysler Corp. everywhere," Press said.

Press said that Genesis sets no timetables or concrete numerical goals for winnowing down the dealer body.

Press also said Chrysler has no firm plans to trim vehicles. He said Chrysler wants to hear what dealers have to say about all aspects of its business plan. Genesis will be the forum under which those issues are resolved.

"We want to be transparent and open about where we will be in the next four to five to six years," Press said.

Chrysler told a series of regional gatherings about the plan this week and will talk about it further at NADA, the annual auto dealers convention.


Moving quickly
Chrysler has already cut several unprofitable products from its lineup. The company won't say whether it will cut more, but it has promised to eliminate duplication.

Dealers who attended meetings where Chrysler discussed the plan last week say Chrysler is particularly concerned about duplication in SUVs, crossovers and cars. Press said Chrysler won't just be cutting models. It also will develop new ones in segments where it doesn't have current entries.

"We are not just dropping products we are realigning and adding new ones," he said.

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Old 02-08-2008, 08:58 AM
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Default RE: Dealer Consolidation

They want to be transparent and open, but will they really listen to the dealers?
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Old 02-08-2008, 09:10 AM
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Just found this on yahoo busines news.

AP
Chrysler to Cut Models, Dealerships
Friday February 8, 10:43 am ET
By Jeff Karoub, AP Business Writer
Dealer Says Chrysler Plans to Significantly Reduce Its Product, Dealership Lineups


DETROIT (AP) -- Chrysler LLC plans to significantly reduce its product lineup and number of dealerships as the automaker rolls out a new corporate initiative, a Chrysler dealer in Texas said Friday.
The automaker has told dealers as it outlines its Project Genesis plan that it could cut its number of models by as much as half and reduce the number of dealerships selling its cars by as much as a third in an effort to boost efficiency, according to Alan Helfman, vice president of River Oaks Chrysler Jeep in Houston.

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"I think they're trying to get a little leaner, a little more efficient," he said.

Chrysler spokeswoman Lori McTavish declined to comment, but the company said in a statement that it plans to align Chrysler, Jeep and Dodge product offerings under one roof.

"At this point, we have not made any final decisions regarding our dealer optimization or future product plans, nor has the company set any firm timelines," Jim Press, president and vice chairman, said in the statement.

Helfman said it looks like a good step by the company, but he's concerned about how it might be carried out.

He said Chrysler could run into trouble with state franchise laws that in part protect dealers from going out of business.

"We have two of the largest dealerships in Houston," he said. "I'd love both of them to be ... `Genesized,' but tell me how to do it."

Chrysler earlier this month said it was launching a new ad campaign that includes lower prices on 12 of its vehicles. The campaign aims to cast the automaker as a company that's listening to consumers and responding with new features.

Chrysler, which is in the midst of a restructuring after a majority stake in the automaker was sold last summer to private equity firm Cerberus Capital Management LP, announced in November it planned to cut up to 11,000 jobs, including 8,000 to 10,000 hourly and 1,000 salaried positions.

The cuts came in addition to 13,000 reductions Chrysler announced last February, including 11,000 hourly and 2,000 salaried workers in the U.S. and Canada.

Chrysler LLC: http://www.chrysler.com
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