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.
