More cuts possible to Chrysler's U.S. dealer netwo


News reports indicate Chrysler Group LLC may have to trim as many as 145 more dealers from its U.S. network unless financing for the new-vehicle inventory can be found.

Bloomberg is reporting that GMAC Inc., which replaced Chrysler Financial as the preferred lending arm, has been negotiating with a number of dealers over new inventory.

If dealers cannot work out a deal with GMAC or another lender, they run the risk of loosing their franchise agreements, said Kathy Graham, a Chrysler spokeswoman.

Chrysler already terminated 789 dealers from its network when the automaker entered bankruptcy protection in the U.S. earlier this year.

When the Michigan company emerged on June 10, it was under the control of Fiat SpA.

Sources say that of the roughly 1,500 stores that have applied to GMAC, approximately 90 per cent will qualify while around 10 per cent will now. Graham said 85 dealers have been refused financing already.

There is no word on how this could affect the Chrysler Canada network.

- With files from Bloomberg News