Judge approves Chrysler plan to end dealership agreements

NEW YORK -- A bankruptcy judge says Chrysler can go ahead with its plan to terminate the franchises of 789 of its dealers.

U.S. Judge Arthur Gonzalez issued the order late Tuesday afternoon. It says the franchises can no longer act as authorized Chrysler, Dodge and Jeep dealers, effective immediately.

Chrysler says it needs to cut its dealer ranks by about 25% as part of its plans to cut costs and quickly emerge from Chapter 11 protection.

But the dealers insist that their existence doesn't result in any substantial costs for the automaker.

Chrysler wants to consolidate its network around dealers that offer all three of its brands and wants fewer, more profitable dealers that can invest in their locations.

About 98% of the vehicles at rejected dealers have been reallocated to stores that will be carried to the new Fiat-led Chrysler, the Chrysler attorneys said Tuesday.