Chrysler rejects two local South Plains contracts - KCBD NewsChannel 11 Lubbock

5/14/09

Chrysler rejects two local South Plains contracts

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By Ann Wyatt Little  - bio | email

LUBBOCK, TX (KCBD) - Fifty Chrysler dealerships across the state of Texas received devastating news via UPS including two right here on the South Plains. Dealers across the country were taken by surprise. Documents were filed in U.S. Bankruptcy Court Thursday detailing the 789 Chrysler contracts that would not be renewed. The dealers received notice via UPS.

"This is devastation across the country to many communities. Those employees who suddenly find themselves without a job," says Annette Sykora, the previous chairman of the National Automobile Dealers Association. She says it's still too early to know exactly what the domino effect of Thursday's announcement will be. "It's hard for the dealer to know where they stood. There was a lot of worrying and waiting," adds Sykora.

As a Chrysler dealer herself Sykora and others have been in limbo. "We've been waiting and wondering since they filed bankruptcy about our fate," she says.

And that's exactly what UPS delivered to the Smith Dodge Chrysler and Jeep in a confidentially sealed envelope. "We got an assumed letter, so we're really thankfully," says Sykora. Meaning for the Levelland dealership and about 2,400 others across the country their contracts were assumed and recognized by the restructured company.

But Stanley Motorplex in Brownfield and Bobby Trent Motorplex in Denver City did not receive that letter, as they were among the list 789 dealers whose Chrysler contracts were rejected. NewsChannel 11 contacted Stanley Motorplex and they say they are still trying to determine what the exact impact of the announcement means.

"Anytime a community loses a business but especially a business like ours that contributes so much to a community and to lose that business, even a portion of it, is not good," adds Sykora. She says it could have been much worse. "I think the good news for West Texas is we have a more stable economy and a lot of it is our conservative hard working people out here," she says.

According to court documents those 789 affected dealers will continue with business as usual until mid June. Since all of this is being handled through a bankruptcy court, Chrysler is not required to buy back inventory, instead rejected dealers will be matched with accepted dealers to buy parts, tools and cars. General Motors is expected to announce sometime Friday that it too will cut dealers.

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