- The Washington Times - Saturday, February 9, 2008

From combined dispatches

DETROIT — 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 yesterday.

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.

“I think they’re trying to get a little leaner, a little more efficient,” he said.

The company said it plans to align Chrysler, Jeep and Dodge product offerings under one roof.

James Edwards, a general manager at Heritage Chrysler Jeep in Alexandria, said yesterday that the company’s plan to consolidate and close some of its 3,600 dealerships makes sense.

“It’s pretty obvious there are too many products,” he said. “We’re competing against ourselves.”

Mr. Edwards said that in five years, stand-alone Chrysler, Dodge or Jeep dealerships will be non-existent. Instead, one facility will sell cars from each brand.

“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,” said Chrysler President Jim Press.

The automaker needs “fewer SUVs” and has “redundant” models, including minivans that compete against one another. Chrysler is working to “right-size” production and models, Mr. Press said.

The company now sells 28 models, according to Autodata Corp. in Woodcliff Lake, N.J.

Mr. Helfman said a restructuring 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 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 debuting 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 middle 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.

Staff writer Gregory Lopes contributed to this article, which is based in part on wire service reports.


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