The BERO Group Publications

Chrysler Successful in Majority of Dealership Arbitrations

By The BERO Group

In late spring, Chrysler Group LLC chose The BERO Group as one of four firms to testify in 21 Section 747 dealer arbitrations across the country. Of the 108 cases arbitrated, Chrysler won 76 and lost 32.

Under H.R. 3288-186, all of the Chrysler and GM dealerships terminated in the automaker bankruptcies were allowed to arbitrate for reinstatement of their franchise agreements. The arbitrator was required to consider seven factors including the covered dealership’s profitability between 2006 and 2009 as well as its economic viability. More specifically, according to the congressional record, the profitability would be with respect to the new vehicle sales of the covered manufacturer because that is what is “critically important to the long-term health of the manufacturer.”

While “profitability with respect to new vehicles” might seem like a straightforward measurement, there was considerable room for interpretation of the term. The BERO Group worked with the Chrysler trial teams to present the appropriate profitability and economic viability calculations relevant to Section 747.

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