A subsidiary of financially troubled Chrysler Corp. went to court yesterday to block a Fairfax dealer from selling the automaker's cars and trucks.
Corporate officials denied the move represented a reversal of its weekend policy to sponsor tent sales to reduce Chrysler's bloated inventory of 1979 models.
At the request of Chrysler Credit Corp., Circuit Court Judge Bureh Millsap issued a temporary injunction barring Fairfax Dodge Inc. of 10470 Lee Hwy. from selling any vehicle without prior permission of the credit company.
Chrysler Credit is a wholly owned subsidiary of Chrysler and traditionally finances Dodge, Plymouth and Chrysler dealers' unsold new cars.
Chrysler officials, who are seeking federal aid to overcome losses of $261 million the first half of this year, insisted that the Virginia case stems from an individual dispute and does not represent an across- the-board policy decision.
Asked why Chrysler would want to stop sales just hours after promoting weekend tent sales, Barry Moore, Chrysler's zone sales manager for the Washington area, at first denied the company had sued Fairfax Dodge. He later said the corporation went to court to recover $140,000 that Fairfax Dodge owes on unsold cars.
Fairfax Dodge is accused in the suit of failing to forward any of the money from its last 27 car sales to Crysler Credit to reduce its debt.
When a dealership sells a car, a portion of the proceeds is applied to the dealer's debt. The papers filed against Fairfax Dodge said that had not been done in July or August.
Chrysler's problems with dealers in the Washington area surfaced earlier this month when three area companies suddenly closed, leaving buyers of new cars confused about deposits they had on undelivered purchases. Other motorists arrived at the closed dealerships to find the cars they left for repair locked up and unavailable.
Those three companies were Capitol Hill Chrysler Dodge, Marlow Heights Chrysler-Plymouth.
While representatives of Chrysler Credit were in circuit court seeking the injunction, Fairfax Dodge President Paul Smith, was in Seabrook, "doing battle" with corporate officials there.
Smith said he took over the agency in early July and has been attempting since then to strike a deal with Chrysler to pay off the debt and increase his vehicle inventory.
Papers filed in the court case said Fairfax Dodge has 218 vehicles in inventory. Smith said there are only about 100.
Smith said corporate foot-dragging and indecision had cost him an opportunity to participate in the company's latest dealer incentive sales program. He also complained that even after he offered to pay the full amouht of the agency's debt. Chrysler officials here and in Detroit refused to increase his inventory to include the popular small cars, such as the Omni.
Chrysler officials refused comment on Smith's allegations.
Technically, Smith is not an authorized Dodge dealer. Fairfax Dodge has not had an official dealer since the earlier owner turned over the business to Smith July 9.
Smith, who said he has been in auto sales here for 12 years, has asked Chrysler for the franchise.
So far, Chrysler has withheld approval.