Chrysler dealers question franchise terminations

NEW YORK (AP) — A parade of Chrysler dealers slated to lose their franchises took the stand Thursday in the automaker's bankruptcy protection case, one choking back tears, as they touted their sales and service records and questioned how they were chosen for termination.

Just under 20 dealers were sworn in at the beginning of what was expected to be a lengthy day of testimony from both dealers and Chrysler LLC executives. Arguments on the motion are scheduled for Tuesday.

It was unclear when U.S. Judge Arthur Gonzalez will rule on Chrysler's motion to cancel the dealerships' franchise agreements, or how this will effect Chrysler's plans to sever ties with them effective Tuesday.

James Tarbox broke down while testifying about learning that the franchises for his pair of dealerships in Rhode Island and Massachusetts were included on Chrysler's list of the 789 it plans to terminate.

"I thought there must be a mistake," he said choking back tears.

Though acknowledging that he posted a loss for 2008, Tarbox said his dealerships have won awards for both sales and service in recent years.

Auburn Hills, Mich.-based Chrysler claims that it needs to reduce its dealer base by about 25 percent to a leaner network of about 2,400 dealers in order to emerge from Chapter 11 bankruptcy protection as a stronger company.

But the dealers argue that they don't cost the automaker anything. They say that if Gonzalez approves Chrysler's motion, hundreds of dealerships will be shuttered, and thousands of workers will lose their jobs.

A group representing about 300 of the dealers have filed an objection. They also earlier opposed Chrysler's sale to Fiat, saying it was tied to the plan to eliminate the dealerships. Several attorneys for individual dealers also have filed objections.