Chrysler dealers endorse latest restructuring move

By Kevin Krolicki

SAN FRANCISCO, Feb 10 (Reuters) - Chrysler dealers, meeting as a group for the first time with the struggling automaker's new management team, on Sunday expressed support for a newly unveiled plan to shrink Chrysler's retail network and streamline its product line-up.

The privately held No. 3 U.S. automaker last week outlined plans to reduce its roughly 3,600 U.S. dealerships to a much smaller number that will represent all three of its brands: Chrysler, Jeep and Dodge.

The plan marks an extension of efforts already under way at Chrysler to encourage dealers to merge with or buy out other dealers to create "superstores" for its three brands.

But by more aggressively restructuring its retail network, Chrysler expects to be able to stop making many of the 30 models it now offers -- such as the Dodge and Chrysler-branded versions of its top-selling minivan.

The promise is that in turn will reduce product development and marketing costs for Chrysler and boost profits for a smaller network of allied dealers able to save on inventory costs and spend more on marketing and dealership improvements.

Some dealers had expressed concern heading into Sunday's annual meeting with executives that Chrysler could look to strong-arm smaller dealers out of the market or pull out of some areas altogether.

"I was a little down, but now I'm more upbeat," said Jeff Dubose, a Dodge dealer in Wilmington, North Carolina, since 1965. "I thought they were going to force dealers, but that doesn't seem to be the issue."

About 55 percent of Chrysler dealers now carry all three of its brands. The new restructuring -- known internally as "Project Genesis" -- is aimed at encouraging mergers between dealers in cities and suburban areas, executives said.