Lawyer says plan to ax dealers not Chrysler's decision

By Nick Zieminski

NEW YORK (Reuters) - A lawyer for Chrysler dealers facing closure as part of the automaker's bankruptcy reorganization said on Tuesday he believes Chrysler executives do not support a plan to eliminate a quarter of its retail outlets.

Lawyer Leonard Bellavia, of Bellavia Gentile & Associates, who represents some of the terminated dealers, said he deposed Chrysler President Jim Press on Tuesday and came away with the impression that Press did not support the plan.

"It became clear to us that Chrysler does not see the wisdom of terminating 25 percent of its dealers," Bellavia said. "It really wasn't Chrysler's decision. They are under enormous pressure from the President's automotive task force."

He added the government task force, which he criticized for having no members with retail experience was, in effect, attacking U.S. entrepreneurs.

"What is the next task force? Shoe stores? Pizzerias?" Bellavia said at an event in Manhattan to publicize the dealers' concerns ahead of a bankruptcy court hearing.

Chrysler notified its dealers this month it plans to eliminate 25 percent of its retail showrooms and is seeking permission from a U.S. bankruptcy judge to terminate franchise agreements with 789 of 3,181 dealers as of June 9.

A spokeswoman for Chrysler said the decision to cut a quarter of the dealers was "not coming from the task force."

"Our position is that the market can't support the number of dealers that are out there," said spokeswoman Carrie McElwee. "This has been our plan for more than 10 years to combine Chrysler, Dodge and Jeep under one roof."