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DaimlerChrysler denies lack of confidence in legal case

DaimlerChrysler UK says its decision to issue its Mercedes-Benz dealers with a second termination notice is not a sign of failing confidence in its restructure plans – but merely a “precaution”.

The company has now given its MB-UK dealers two-years notice to quit, alongside the 12-month notice issued at the end of last year.

Dealers are taking legal action against the original termination notice and are due to meet DC-UK's lawyers in the High Court on April 30.

Nick Adams, a leading figure in the protesting Mercedes-Benz Dealers Campaign, said the move demonstrates an acceptance by DC-UK that it stands to lose the court case.

But a DC-UK spokesman said: “On the advice of our lawyers we have issued a 24-month termination notice as a precaution. It is not a sign of weakness and we're standing by our actions to date.”

But Mr Adams said: “What the company is saying is, should it lose in court, it's given us two years notice, from April 17, of termination, which is the required time laid out in our contracts.

“We believe that this lack of confidence and the outcry from customers, politicians and the media has forced DC-UK to re-evaluate the original termination notice.”

Mr Adams also revealed that MB-UK was, for the first time in the dispute, offering a “fair exit” package to those dealerships which will not form part of the its “hub” strategy, consisting of 20-acre 'experience centres” supported by market area concepts.

The exit package will consist of, according to the letter sent to dealers, “fair prices and goodwill”. In Germany, Mr Adams said, the goodwill payment can amount to up to five times an outlet's annual earnings. However, the “fair exit” package is conditional on dealers withdrawing from litigation, Mr Adams said.

Mercedes-Benz dealers and DC-UK are due to meet in the High Court for the first time on April 30, where the dealers' lawyers will push for a quick resolution to the case.

“We believe the issue should be decided quickly for the benefit of all those parties involved, including our customers,” Mr Adams said.

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