Local Chrysler dealers on the chopping block include Laurel Dodge, Montrose Motors in Germantown, Reed Brothers Dodge in Rockville, Westside Dodge in Potomac, Darcars Of Fairfax, Dulles Motor Cars in Leesburg and Gunning Motors in Manassas.

Chrysler, which has received $4 billion in federal loans, has been operating in bankruptcy protection since April 30. The automaker is rushing to pare down its business and cut costs.

Chrysler said in court documents filed today that it has been evaluating its dealerships since 2001 to identify the most desirable ones, an effort it has coined "Project Genesis." Over the past eight years, Chrysler consolidated its dealer network within the limits of existing contracts and rules, an effort that cost the company $216 million, Chrysler said. In recent months, the automaker has worked with its would-be owners -- a coalition lead by Italian automaker Fiat -- to "refine" the evaluation of dealers, Chrysler said.

"Immediate rejection of these agreements is necessary and appropriate to begin the work necessary to complete the transition to the smaller, more effective, and more profitable dealer network . . . and minimize disruption upon the closing of the Fiat" sale, Chrysler said.

In court documents and testimony since Chrysler filed for bankruptcy Apr. 30, Chrysler's executives have described an unwieldy and outdated dealer network, in which of its 3,181 dealers sell 90 percent of Chrysler's cars sold in the United States. An "appropriate" dealer network is critical to the automaker's success once it emerges from bankruptcy, they said.

The current "size and scope" of the dealer network has created "significant" challenges as market conditions and demographics changes over time, said Peter Grady, Chrysler's director of dealer operations, said in a statement filed with the U.S. Bankruptcy Court in Manhattan.

Many dealers sales have fallen below target levels as market share shrunk with the rise of foreign competitors, who do not have to deal with a "legacy network of dealers," Grady said, adding that some of Chrysler's dealerships serve an ever diminishing population of rural customers.

At the same time, General Motors is telling 1,100 dealers that it will not renew their franchise agreements when they run out next year.

Yesterday, dealers from across the country flew into Washington to lobby lawmakers against closing large chunks of GM and Chrysler's dealer networks.

"What we're finding is fundamental misunderstanding of the automobile business and how it operates," said Gerard Murphy, president of the Washington Area New Automobile Dealers Association. "People are looking at the automobile business like a Starbucks model, where it makes sense to divest yourself of locations."

Murphy said dealers are driving revenue to the automakers, not taking it away.

"This is tantamount to divesting yourself of troops when you have a siege at the gates," he said. "How does that help?"(WP)