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Dorchester dealer reclaims right to sell new Dodges

Tuesday, July 20, 2010 | Bonnie Kavoussi, The Boston Globe

Westminster Motors in Dorchester, which lost its status as a Chrysler dealer last year, won an arbitration ruling yesterday that restored its ability to sell new Dodge cars and trucks — making it one of only a handful of Chrysler dealerships to reverse a shut-down order.

The dealership had been selling used cars since last summer, when its agreement with Chrysler was terminated. Jim Bickford, a principal at the dealership, said he plans to start selling new Dodges within 60 days under the old name, Westminster Dodge.

A decision to shut down Westminster would have left the Boston area without a Chrysler dealer, said Leonard Bellavia, lead counsel for Westminster Dodge.

David L. Evans, the arbitrator, criticized Chrysler’s plan to service the Boston area by selling new Dodge vehicles only at a Quirk dealership in Braintree, which would also sell Jeeps and Chryslers.

“While Braintree may be only 6 to 9 miles away,’’ Evans wrote, “the excursion can be an ordeal.’’

He also praised Westminster Dodge’s record, writing that it is a “proven performer’’ in “a desirable, underserved location.’’

Thirty of 789 Chrysler dealerships ordered to shut down in May 2009 have won arbitration cases, a Chrysler spokesman said.

Chrysler Group LLC decided to close a quarter of its dealerships in an effort to reorganize after filing for bankruptcy protection. The government arranged for the Italian automaker Fiat, which currently has a 20 percent ownership stake in the company, to manage Chrysler.

After seeking bankruptcy protection, Chrysler was required to shut down dealerships to secure financing from the government, which loaned the automaker about $14 billion.

About half of the dealers entered arbitration; 7 percent have won. Most have settled, withdrawn their cases, had the cases dismissed, or lost.

“While difficult, the actions to reduce Chrysler’s dealer network were a necessary part of its viability,’’ Chrysler spokesman Michael Palese wrote in an e-mail.

Bickford said he is ecstatic. When he received a termination letter, “I was obviously devastated, because it’s something we’ve worked for all our lives.’’

“ . . . You get a letter in the mail that says, ‘We’re taking your dealership away and giving it to someone else,’ ’’ Bickford said. “Take one person’s property and give it to another one. It’s just morally wrong, you know.’’

He said his dealership was profitable in 2008 and at the beginning of 2009. But he lost money selling only used cars. “I need a new car franchise to survive,’’ he said.

Bickford said he hopes to rehire most of the employees who were let go last year. His dealership, which used to employ 46 workers, now has 28.

The arbitration decision is the first such victory for a former Chrysler dealer in Massachusetts. Chrysler has won three arbitration cases in Massachusetts, three others have been settled, and another was withdrawn.

Robert O’Koniewski, executive vice president at the Massachusetts State Automobile Dealers Association, said the decision was a win for the free market.

“If a dealership is going to survive or sink, that should be dictated by the forces of the marketplace,’’ he said.

General Motors, which filed for bankruptcy protection in 2009, also shut dealerships. GM ordered about 2,000 to close; about 35 were in Massachusetts. GM could not be reached for comment.

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