Chrysler's hotly contested plan to jettison a quarter of its North American dealer network has been given the green light by New York Bankruptcy Court that has been processing that failed automaker's restructuring procedure. The affected dealers had countered Chrysler's arguments that retaining all 3,181 dealers would incur additional costs and that a leaner, more efficient network was needed in order to build a profitable future when it emerges from the Chapter 11 process.

However New York Bankruptcy Court Judge Arthur Gonzales gave the go-ahead late on Wednesday afternoon to Chrysler to terminate the 789 dealers with immediate effect meaning they are no longer authorised to sell Chrysler, Dodge or Jeep vehicles. The judge's decision came at exactly the same time as the U.S. Supreme Court cleared the way for Chrysler to emerge from Chapter 11 process by rejecting the claim of a group of objectors to the sale to receive a hearing of their case from the Court.

Following the Court's decision Chrysler's Vice-Chairman and President Jim Press issued a statement in Michigan. "We are pleased with the Judge’s decision allowing us to go forward with the realignment of our dealer network. A financially strong, competitive dealership network can increase sales and afford to invest in facilities, in people, in training, and in amenities, with a major focus placed on customer satisfaction," said Press. "The 2,392 U.S. dealers that will move forward will be integral to the success of the new Chrysler.

"The decision about which of the 3,181 dealers would be brought forward to the new company was gut wrenching, but it was an absolutely essential part of our effort to assure the long-term viability of the new Chrysler Group," continued Press. "The goal of the sale of our assets to a new company is to position Chrysler to move forward as a strong, financially sound automotive company serving our customers with a broader and more competitive lineup of environmentally friendly, fuel-efficient, high-quality vehicles, and an equally high level of customer service through an efficient dealer network.

"The 789 affected dealers represent about 25 percent of the company’s dealer network and about 14 percent of total sales," he continued to say. "We have communicated to these dealers that we will redistribute 100 percent of the eligible inventory. Discontinuing these dealerships will save the company about $1.4 billion over 4 years in product engineering and development costs for 'sister vehicles,' $150 million annually in marketing and advertising costs, and $33 million annually in administrative costs. The 2,392 Chrysler Jeep and Dodge dealers moving forward with the new Chrysler are poised and ready to take care of customer sales, warranty, service and parts requirements," Press' statement concluded.