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64 Former Chrysler Dealers Sue Feds

Claim Washington unjustly stole their livelihood during Chrysler bailout.

by on Feb.18, 2011

One of the many closed Chrysler dealers, which initially planned to switch to selling Mahindra pickups.

A group of 64 former Chrysler dealers, terminated as part of the maker’s government-funded bailout, have sued the federal government for what they claim was the unjust taking of their businesses.

The White House auto czar originally approved plans to slash thousands of General Motors and Chrysler dealers once the two makers emerged from bankruptcy, though the figure was eventually reduced, in part, under a government-mandated arbitration process.  But Chrysler’s retail total was ultimately reduced by 789, to about 2,400 today.

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The 64 that have signed onto the new lawsuit claim the closures were an unconstitutional taking of their livelihoods for which they were not properly compensated.  They’re seeking damages of at least $130 million.

While their lawyers acknowledge there could have been a “significant disruption” of the domestic auto industry without the multi-billion-dollar bailout of GM and Chrysler, they insist the cost to the dealers “must in fairness and justice by borne by the public as a whole.”