Chicago Automobile Trade Association

GM: ‘Hundreds’ of dealers could be restored

October 28, 2010

Hundreds of the 1,350 General Motors dealers who lost their franchises last year could see them restored in a congressionally mandated arbitration process that begins later this month, the company’s interim CEO said Jan. 6. Pressed afterward, he walked the number back to about 100.

GM had planned to close the 1,350 dealerships this year, to dump poor performers and better align its dealer base with much lower consumer demand for autos, according to news reports. In many cases, GM had dealerships too close to one another and competing too much on price, the company said.

Congress passed legislation late last year that forces GM and Chrysler Group LLC, which shed 789 dealers last year, to give dealers a chance to appeal closure decisions. Both companies went through bankruptcy protection in 2009 and are receiving government aid.

Restoring some dealerships could be good because they would sell more cars for GM, interim CEO and Chairman Ed Whitacre Jr. said

But it also could be bad, Whitacre contends, if a "lousy dealer" with a poor storefront gets a franchise back.



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