Last updated at 13:10 BST, Friday, 15 May 2009

Chrysler loses quarter of dealers


15 May 2009

The car maker Chrysler is closing down a quarter of its dealerships in the United States. The move comes two weeks after Chrysler - hit hard by a slump in sales caused by the economic downturn - filed for bankruptcy.

Greg Wood in New York

Chrysler logo

Chrysler has filed for bankruptcy


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Chrysler has written to all its 3,200 dealers to tell them whether or not their franchises are going to be terminated.

In a move which will deal a serious blow to small towns across the United States, the company plans to eliminate nearly 800 dealerships in a matter of weeks. It says the network is antiquated and sells far fewer cars per dealer than foreign competitors like Honda.

The dealerships are independent, often family-owned businesses which now face the loss of their livelihoods. The move will have to be approved by the bankruptcy courts.

General Motors, which itself is struggling to avoid bankruptcy, is sending letters to around a thousand of its dealers, warning them that it will not renew their franchises when they expire late next year.

Greg Wood, BBC News, New York


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rights to sell Chrysler's cars in a particular area using the company's name
stopped being valid, brought to an end
deal a serious blow to
be very damaging to, have a very negative impact on
to eliminate
to close down
out-of-date, inefficient
face the loss of their livelihoods
find themselves in a situation where they are unemployed and so do not get any income needed to pay for food, a place to live etc.
when you have no money to pay your debts
is struggling to
is finding it very difficult to, may be unable to

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