Following the announcement of 26,000 job cuts yesterday, Chrysler Group unveiled
a two-part revenue generation and cost cutting plan to 4,410 U.S. dealers. They
were notified of the plan by M. John MacDonald, senior vice president of sales
and field service and it became effective immediately.
The first part of the plan calls for a Market Share Allowance, an incentive
programme for dealers based on their number of new vehicle sales.
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Under the new plan, Chrysler Group will set sales objectives for each dealer
every month, and dealers will be rewarded for meeting or exceeding these goals.
The stair-step program ranges from no payment per vehicle if dealers reach less
than 75 percent of their target, all the way to tripling the amount of money
they currently receive for each vehicle sold when hitting 110 percent of their
sales objective.
"This is another part of our turnaround plan, but what makes this one
truly unique is that we are not just cutting costs, but we are increasing revenues
as well," said MacDonald.
In order to fund the new program, Chrysler Group will pass reimbursements for
petrol in new vehicles on to dealers, streamline the time-table for dealer preparation
of new vehicles, adjust the reimbursement formula that dealer associations receive
for local advertising, decrease option margins by three percent, and eliminate
an allowance fund for technology.
"We are hopeful that this becomes a win-win situation for all of us by
increasing our revenues at the same time we are decreasing costs," said
MacDonald. "It just makes sense in our current business environment."
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