According to reports, senior lawyer Louann Van Der Wiele told a House Judiciary subcommittee that attempting to restore dealer franchise rights "will simply take Chrysler back to the future... Complete liquidation, with all of its dire consequences could follow."

The termination of 789 dealership contracts was one of the first moves Chrysler made after declaring bankruptcy at the end of April. The company claims the contracts should not be reinstated since the move was approved by the court overseeing the restructuring.

General Motors also terminated dealership contracts, more than 1,100, but the company has been paying dealers $600 million as part of the shuttering plan. Chrysler has no such payment program in place.

The Obama administration, which has offered billions of dollars to the struggling automobile companies, is against congresses involvement in this.

The move to force Chrysler to address the dealer concerns about their rights according to contracts, easily passed the House. It is included in a annual spending bill; but the Senate seems to be less motivated to hurriedly pass the measure.

Still with this measure before the Senate, Italy's Fiat, which purchased a 20% stake in Chrysler, has continued to move forward with integrating the two companies. Fiat is already transferring to Chrysler its small-car and fuel-efficient engine technology. Even with these moves and a favorable end to the dealership contract debate for Chrysler it will likely be a couple years before the company is profitable again.

Instant Insights /

Chrysler Could Still Face Liquidation

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