GM to reinstate more than 50% of dealerships
By Dan Strumpf |
March 8, 2010, Monday
|
Print Edition
Print Edition
GENERAL Motors Co will reinstate more than half the dealerships in the United States that it targeted to drop from its network.
GM executives said last Friday about 600 dealerships out of the 1,100 seeking to stay with GM will receive letters giving them the option to remain with the auto maker.
GM last year told 2,000 dealerships it would revoke their franchise agreements in October as part of its restructuring. The company has said it needs to shrink the number of showrooms to keep the remaining ones healthy.
The dealerships, who say they have been treated unfairly, have been appealing the decision.
The cuts to GM's 6,000-dealer network were designed to compensate for much lower demand for cars and trucks, but some dealers have argued that lots that are still profitable are at risk, and that the auto maker hasn't offered enough details about how it's choosing which businesses to shutter.
GM and Chrysler, which has slashed 789 dealers, have said they would reconsider the cuts. The decision was a compromise meant to avoid federal legislation that would require the showrooms be kept open.
Under the revised plans, dealerships would get face-to-face reviews, binding arbitration and faster payments to help dealers slated for shutdown.
Congress-brokered talks between dealer groups and the auto makers began in September. But the talks stalled over disputes about the review process for targeted dealerships and other issues. Looming over the fight has been the threat of federal legislation to deal with the closures.
GM executives said last Friday about 600 dealerships out of the 1,100 seeking to stay with GM will receive letters giving them the option to remain with the auto maker.
GM last year told 2,000 dealerships it would revoke their franchise agreements in October as part of its restructuring. The company has said it needs to shrink the number of showrooms to keep the remaining ones healthy.
The dealerships, who say they have been treated unfairly, have been appealing the decision.
The cuts to GM's 6,000-dealer network were designed to compensate for much lower demand for cars and trucks, but some dealers have argued that lots that are still profitable are at risk, and that the auto maker hasn't offered enough details about how it's choosing which businesses to shutter.
GM and Chrysler, which has slashed 789 dealers, have said they would reconsider the cuts. The decision was a compromise meant to avoid federal legislation that would require the showrooms be kept open.
Under the revised plans, dealerships would get face-to-face reviews, binding arbitration and faster payments to help dealers slated for shutdown.
Congress-brokered talks between dealer groups and the auto makers began in September. But the talks stalled over disputes about the review process for targeted dealerships and other issues. Looming over the fight has been the threat of federal legislation to deal with the closures.
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