Cutrubus wins arbitration in Layton

LAYTON -- A stormy battle between Chrysler Corporation and Homer Cutrubus ended Tuesday in partial victory for Cutrubus.

A federal arbitrator ruled that Cutrubus, who has dealerships in Riverdale and Layton, was unfairly denied a franchise by Chrysler last year for his dealership in Layton.

Arbitration for his Ogden-area dealership on Riverdale Road will take place in about three weeks, but Cutrubus said he is elated the arbitrator ruled in his favor in Layton.

"We're happy to be selling Chrysler and Dodge again," he said.

"We've been with Chrysler a long time, and we're just tickled that we were able to arbitrate this, to have an opportunity to put our case on, and we felt that we were a very strong dealer, and obviously it came out in our favor."

Cutrubus was one of more than 700 dealerships that Chrysler shut down in May 2009 as part of its bankruptcy filings and federal bailout. It is only the second to win arbitration with Chrysler to get its franchise back. The other is Deland Dodge in Deland, Fla.

Cutrubus did not take the dismissal quietly, saying his dealerships held a "five star" rating from Chrysler, meaning he was one of the most profitable dealers in the network.

Chrysler said Cutrubus' dealership didn't meet the financial and sales criteria it demanded.

Cutrubus admitted he had not cooperated with Chrysler in selling its full line of vehicles, but said his performance still showed he should not have had his franchise taken away.

A law passed by Congress in December allowed dealerships that thought they had been unfairly treated to demand binding arbitration.

Hinckley Dodge in Ogden announced last week that it had lost its arbitration appeal and will shut down by the end of the month. About 30 employees in the Ogden location will lose their jobs.

A separate Chrysler franchise Hinckley opened in 1955 will stay open.

The arbitrator said in the decision that Cutrubus' Layton dealership was a profitable dealership before losing its franchise and remained viable even without the franchise.

As a result, the arbitrator said, the dealership should be able to resume selling new Chryslers. The arbitrator also cited the dealership's length of service and community support.

In the arbitration, Chrysler and Larry H. Miller Group cited the Miller group's new Chrysler franchise in Riverdale, saying a new dealership in Layton will take business away from it.

The arbitrator rejected that argument, saying the Miller Group acquired its franchise knowing Cutrubus was in litigation and should know that Cutrubus could win his back.

Chrysler, in a statement from its legal department, said it was disappointed in the arbitrator's decision regarding Cutrubus but would follow the law.

"This decision undermines the Federal Bankruptcy Court Order that affirmed the rationalization process used to reject the dealership agreements," the statement says.

"While difficult, the actions to reduce Chrysler's dealer network were a necessary part of Chrysler Group's viability and central to the financing and partnership with Fiat.

"The only alternative would have been complete liquidation, which would have resulted in all 3,200 dealers closing, hundreds of thousands of lost jobs, and defaulting on taxpayer loans."

Michael Palese, spokesman for Chrysler, said the company will send Cutrubus a letter of intent outlining the financial requirements his company has to meet to rejoin the Chrysler network.

Cutrubus said his Layton dealership will start getting new cars as soon as Chrysler sends him his letter of intent and he works out the financial details.

"There's still some processes to go through now, but for all intents and purposes the tough part is over with as far as determining whether we should or should not be a dealer after the bankruptcy," Cutrubus said.

"We're happy, and let me tell you this, our employees and the people that have been with me for years that have worked their hearts out, they are elated. It's hard to have meetings with them, because its hard to keep the emotion in.

"When I say we prevailed, it's all my employees and my family that have prevailed."