GM plans to end contracts with more dealerships, report says
General Motors Corp. plans to cut loose up to 450 more dealers, beyond the 1,124 dealerships it notified two weeks ago, trade publication Automotive News reported. It cited two sources familiar with GM’s strategy.
GM sales chief Mark LaNeve said the number is “less than half” of that amount, the report published today said.
The struggling automaker will begin contacting those dealerships Monday, Automotive News said, the same day it’s expected to file for bankruptcy and identify 14 plants it plans to close.
According to the report, GM will use the same exit strategy for both rounds of dealership cuts: decline to renew a dealer’s franchise agreement when it expires late next year.
It’s unclear how many St. Louis-area dealerships were told on May 15 that they’d lose their franchise agreements. GM did not release a national list, and it let dealers decide to reveal if they had been affected. The automaker also said dealers could appeal.
Affected dealerships won’t necessarily close, but they will not be able to sell new GM vehicles or perform warranty repair. They could survive by selling another automaker’s brand or focusing on used-vehicle sales.
GM has been planning the cuts as part of its viability plan. A smaller dealership network, the automaker says, keeps each dealer stronger, more profitable and more focused on competing with other automakers’ dealers versus fellow GM ones.
GM plans to drop 2,600 dealerships by the end of next year, leaving the company with about 3,600 dealerships.
I want them to do whatever’s necessary to save the tax payers money. What’s funny is no one thought of this years ago when they were in trouble. The economic down turn IS NOT solely responsible for this mess. Oh that’s right the guys that are responsible have cashed out long ago and living on easy street. Jobs they’ll be lost but we’ll bounce back we always have.
I know Merollis and Boehmler were axed with the last cut earlier in May.
You guys have `loose’ instead of `lose’ in the teaser headline on the home webpage.
Sorry… My mistake, unless it was just rewritten.
If Merollis is closing, no Chevy will reside in our driveway since Johnny Ripoff Chevrolet will be the only Chevy dealership in North County.
Oh the days of GM glory with the Oldsmobile Brava and Chevy Berretta Iroc…. Where did they ever go wrong?
Please close Dave Sinclair! I am tired of that grizzled old guy yelling at me on TV.
Looks like Obama is cutting more jobs. I see he cut 800 or so at the Wentzville plant. Now more dealers. I thought he said he was going to create jobs.
JoeCool,
You can’t be so naive, or can you? (lol). Hopefully new jobs will be created through construction maintenance that is very much needed on our highways, bridges etc. and new technologies but you have better believe it will not be on wasted things such as car dealerships and old outdated methods of doing things.
Many will suffer greatly as this country attempt to get through a very long and painful labor before a new birth actually happens in this country. Just hold on tight as the saying goes, it will be a long, long process.
We all have better begin praying much for all the bright brilliant minds to awake in this country, those minds that are truly gifted and able to develop technologies and employment, not the greedy scheming “wall-street” type schemes that became the America’s symbol and now humiliation.
They couldn’t do this years before unless they went into bankruptcy which allows the termination of sales agreements and contracts without having to abide by state laws. They couldn’t be doing these things if they had to follow state guidelines which protected dealers from this kind of ruthless destruction. In many instances, the dealers purchased their franchise from perhaps family members handed down from generation to generation. The value of the dealership was the franchise agreement and the facilities which are layed out and constructed for only one purpose. If they are cut loose, this once valuable asset is now almost worthless.