The dealers have until Jan. 25 to notify Chrysler they intend to seek arbitration, the letter said, reiterating terms of a measure signed into law on Dec. 16.

The letter does not contain Chrysler’s list of criteria for rejection. Chrysler, as required by the law, will outline those terms in individual letters to be sent before January 16, spokeswoman Kathy Graham said.

The dealers lost their franchises June 9 at the end of Chrysler’s six-week, U.S.-directed trip through bankruptcy court.

The arbitration process was signed by President Barack Obama as part of a $446 billion appropriations bill. The legislation also affects General Motors Co., which announced plans to terminate 1,350 dealerships in May in advance of its bankruptcy.

Spokesman Greg Martin said GM is working on its “administrative next step. We plan to communicate with dealers soon.”

The law requires that arbitration must be wrapped up in six months.

Chrysler said in the form letter today that it is “assessing its rights and remedies with respect” to the legislation.

Speaking to reporters on Dec. 17, CEO Sergio Marchionne said restoring some of the large numbers of franchises could “cause havoc within Chrysler.”

Earlier in December, Chrysler had proposed its own binding arbitration process to keep Congress from getting involved. The negotiations ended when the legislation was introduced.

Marchionne said Chrysler’s offer would have “guaranteed a disgruntled dealer the opportunity to air its concern. Having said this, if Congress wants this, Congress gets this. And we’ll live with the consequences and react accordingly.”

Tammy Darvish, a co-chair of the Committee to Restore Dealer Rights, said: “It’s a shame the time and the money that Chrysler and GM have spent to fight this for absolutely no reason at all. If somebody can come back, just let them come back. Why are they going to spend millions more dollars to fight this?”

Doug Alley, owner of rejected Alley’s Chrysler Dodge in Kingsport, Tenn, said he hasn’t yet decided whether he’ll seek arbitration.

“We are assessing our position,” he said. “We’re waiting to see the criteria used for our rejection.”

Chrysler Group had several models that perform in the top three in segment in initial quality. These include the Chrysler PT Cruiser, which is “Highest Ranked Compact Multi-Activity Vehicle in Initial Quality in a Tie”; Dodge Challenger, which ranks second in the Midsize Sporty segment; and the Dodge Grand Caravan, which is third in the Midsize Van/Minivan segment. Several other Chrysler Group models also demonstrated initial quality improvement.

The Jeep brand improved by 30 points and moved up three rank positions, currently ranking 33 among industry nameplates. This jump is attributable primarily to a 47 point improvement for the Jeep Wrangler.

Among the product highlights are:

• Chrysler PT Cruiser, which tied for first place in the Compact Multi Activity Vehicle segment.
• Chrysler Sebring (sedan and convertible), which finished fourth in the very competitive Midsize Car segment.
  Dodge Grand Caravan, which improved by 60 points and now ranks third in the midsize van category.
• What the J.D. Power IQS shows us is that we have some forward momentum. We have figured out how to improve vehicles in production and have taken aggressive actions to continue that progress.

During the course of 2008 and early 2009, Chrysler Group has made tremendous progress on quality, which we can see in our internal measures. The fact is that over last year, Chrysler has reduced its warranty claims by 30 percent. Our internal metrics confirm that we are currently operating with reliability that is better than it has ever been in company history. While the improvement is encouraging, we have by no means arrived at a resting place. With the implementation of Customer Satisfaction Teams (CSTs), Customer Promoter Score (CPS) and other initiatives, we are confident that we will continue to see improvements in our vehicle quality, which will exceed the pace of improvement in the industry as we did in the 2009 IQS.

Source: Chrysler Media Services LLC