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GM to ax struggling dealers

Posted Wednesday, Apr 29, 2009, 2:39 pm in Employee News

General Motors Corp. will force 1,000 to 1,200 underperforming dealerships to close as part of the automaker’s restructuring plan that involves eliminating more than 2,600 franchises by next year, The Detroit News reported.

Those dealers targeted for elimination will know by May 11, according to a GM dealer who watched a video conference Tuesday held by GM executives, The News said. The conference came a day after GM announced it would trim its U.S. dealership ranks by 42 percent, to 3,605 by next year—a deeper and quicker cut than what was included in a Feb. 17 plan rejected by President Obama’s autos task force, the paper said.

According to The News, GM will shed about 500 dealerships by eliminating the Saab, Hummer and Saturn brands. And GM expects 400 to 600 dealerships to terminate the franchises voluntarily based on the struggling sales environment and economy, the paper said. GM would buy back inventory, signage and parts, the dealer said. Company executives also expect 400 to 500 dealers might be consolidated with other franchises, a GM spokeswoman confirmed for the paper. (The Detroit News)
 
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