Opponents of Chrysler Sale Fight to the End in Court

NEW YORK, May 29 -- Lenders and dealers opposing the government-orchestrated sale of Chrysler to Italian carmaker Fiat made one last plea before a bankruptcy judge on Friday, arguing that their rights had been trampled on as the case progressed through court with lightning speed.

Some of the opponents implored Judge Arthur J. Gonzalez to delay the sale, even as Chrysler has argued that time was critical to the automaker because it was losing value every day it lingered in court. At around 9:15 p.m., the last of the stakeholders presented their closing arguments. Judge Gonzalez said he would issue his ruling Monday.

Attorneys for dealers say Chrysler did not use sound business judgment in determining which dealerships should go.

"We have always been a team player. I never received any indication that I was not stepping up and doing my part," said Richard Mealey, who owns a Michigan dealership. He testified that he had received multiple awards from Chrysler for being a top seller, and took on unnecessary inventory after a Chrysler executive begged him to. "We feel totally rejected. Dejected."

Chrysler said it has long been trying to downsize its large and inefficient dealer network and used specific criteria to determine which ones to keep.

Chrysler has asked Gonzalez to approve the sale of the company's assets to a new company jointly owned by Fiat, the United Auto Workers' health trust fund and the U.S. and Canadian governments. The new Chrysler is intended to be a leaner version of its predecessor. It would offer fewer Chrysler brands and its 3,200-dealer network would be reduced by a quarter. It plans to offer smaller, fuel-efficient vehicles from Fiat and have a dramatically expanded global footprint. Fiat has an extensive distribution network in Latin America and Europe.

Chrysler received $6.9 billion in exit financing, according to a Treasury Department statement Friday. This additional investment brings total U.S. investment in the automaker up to about $14 billion.

Despite the administration's support, the automaker's success is far from certain.

The history of cross-continent partnerships in the auto industry is littered with failures. The next several years will test the patience of Fiat, which is trying to build a global empire after it avoided near bankruptcy earlier this decade.

Under Chrysler's plan, it would take two years to set up operations for Fiat's small vehicles to be sold in the United States, and during that time, Chrysler would have to rely on its meager product lineup for survival; even when Fiat's small cars do arrive here, there is no guarantee they will sell, analysts say. Those vehicles would have to compete with the likes of Toyota and Hyundai in a cutthroat market in which Chrysler dealers -- which for years have sold pickup trucks and minivans -- have no established customer base.

"Americans simply believe the bigger the car, the more you pay for it, and conversely, the smaller the car, the less you pay for it," said John Wolkonowicz, senior auto analyst for IHS Global Insight. "I don't hold the Fiat cars as the saviors of Chrysler."