Chrysler Granted Permission for Dealership Closings, Awaits Decision on Fiat Partnership

Chrysler can terminate their 789 dealerships, according to a judge's decision Tuesday, but the automaker still awaits judgement from the Supreme Court about their partnership with Fiat.

U.S. Judge Arthur Gonzalez issued an order Tuesday afternoon saying the franchises, which represent about 25 percent of the company's dealer base, can no longer act as authorized Chrysler, Dodge and Jeep dealers, effective immediately. A written ruling explaining the decision was expected to be filed later.

In the Supreme Court, Justice Ruth Bader Ginsburg has decided to delay the sale to Fiat, which now threatens to derail Chrysler's restructuring plans. In addition, the attorneys representing the dealerships have asked the bankruptcy court to hold its verdict until after the Supreme Court makes theirs.

General Motors Corp. plans to cut about 40 percent of its 6,000 dealers by the end of 2010, but most won't be let go until their contracts end late next year.

Chrysler has endured five weeks of bankruptcy proceedings and appeared all but certain to complete the sale of its assets to Fiat before a June 15 deadline. Fiat can walk away from the Chrysler deal after the June 15 deadline if the Supreme Court doesn't make a favorable judgement by then, leaving the American automaker with little hope.

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