Face it, Joe, you have a problem with dealers

David Sedgwick is the editor of Automotive News.

David Sedgwick | | Automotive News / November 20, 2006 - 1:00 am BEIJING -- OK, let's kill some rumors:

• The Chrysler group is not for sale.
  
  
• The company's unsold inventory of cars and trucks is not unduly bloated.
  
  
• Dealers are not in open revolt against the automakers' tactics to pressure them to order more vehicles.
  
  
• Chrysler did not aggressively prop up production to make Dieter Zetsche look good when he campaigned last year to become DaimlerChrysler's CEO.
  
  
• Chrysler isn't propping up its vehicle sales with big shipments to daily rental fleets.

After a testy interview in Beijing last week with Chrysler group CEO Tom LaSorda and sales chief Joe Eberhardt, I'm willing to accept four of the five statements above.

But I know for a stone-cold fact that at least one of those statements isn't true. Dealers really are in revolt against the company's heavy-handed pressure tactics, and it's going to cost Chrysler dearly in months to come.

Dealers have told Automotive News that Chrysler has shipped them unordered vehicles.

Others say they receive poorly equipped vehicles such as "stripper" Grand Cherokees that are inexplicably equipped with V-8 engines or "loaded" Chrysler Aspens with no onboard navigators.

The Chrysler group's Joe Eberhardt, shown in a January photo, says of his unhappy dealers: "I certainly would not call it a revolt." Photo credit: JOE WILSSENS

For the record, the Chrysler group's U.S. inventories are at about 509,000 units, down from about 648,000 units in June. Eberhardt says Chrysler's sales bank of unordered vehicles -- those notorious "fence" cars -- will be gone by year end.

And LaSorda adds that he'll have a corporate turnaround plan ready by the end of the first quarter.

I wish I could say that I feel reassured, but I don't. Many dealers have told us that such tried-and-true sales tactics as 0 percent financing and big rebates don't seem to work anymore. It's as if they were pushing on a string.

When Eberhardt calls on them to step up and order more cars, they are taking a pass.

"Among 4,000 dealers, you can always find a few that aren't happy," he said during an interview in a meeting room at the St. Regis Hotel here. "You shouldn't be surprised that there is some pushback. … The mood among (most) dealers is that we want to work through this together. … I certainly would not call it a revolt."

It's a revolt, Joe. Trust me.