Chrysler LLC is asking dealers to accept cost cuts and resist the urge to slash orders for new vehicles as the company races to meet a March 31 deadline to prove to the government it can become viable.

Dealers are being asked to accept a .5% reduction in profit margins on vehicle sales and give up an annual increase in the amount they are reimbursed for labor to perform warranty repairs. Chrysler also will stop paying for dealers to fill up gas tanks of cars and trucks before they're sold.

"Dealers understand the need for all parties to put some skin in the game," Chrysler Vice Chairman Jim Press said Sunday, after meeting with dealers at the National Automobile Dealers Association underway in New Orleans. "They realize they can all help us save some money."

Press told dealers the company needs them to keep their inventories at roughly the same levels they were at toward the end of last year, even though sales are expected to slump further this year.

"They told us 'you need to guarantee the viability of this corporation and order some more product,' " said Wesley Lutz, owner of Extreme Dodge/Hyundai Inc. in Jackson, Mich.

Lutz, saddled with excess supply of new cars and trucks, said Press' comments convinced him to order more vehicles, though he initially planned to hold off.

"They put together a very compelling case," he said. Chrysler and General Motors Corp. (GM), surviving on $13.4 billion in federal loans, have until March 31 to deliver plans to become viable without government support.

The loan deal requires concessions from labor unions and debt holders intended to reduce the auto makers' debt and get its labor cost structure in line with foreign-based rivals that operate in the U.S.

Press said the sacrifices being asked of dealers are intended to ensure all parties pitch in to help the company survive.

-By Sharon Terlep, Dow Jones Newswires; 248-204-5532; sharon.terlep@dowjones.com

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