GM prepared for use in arbitration an affidavit from former CEO Fritz Henderson

Article by Christian Andrei, on August 27, 2010

Next week, lawyers of rejected dealerships will have the chance to cross-examine former CEO Fritz Henderson who had submitted an affidavit, saying how the dealer cuts is "key" to GM's being more competitive in the market. In a congressional testimony last year, Henderson said that the dropping of dealers that started in 2009 would result to $2.6 billion in savings.

Henderson's statement had been widely criticized and since GM had only scheduled one day next week for dozens of lawyers to cross-examine Henderson, many are left to wonder about what the process will be.

The dealers' lawyers are worried that there won't be enough time to dispute GM's arguments.

According to Henderson's affidavit, GM dealer cuts will result to savings of $2.15 billion in direct dealer-support programs and $415 million in reduced structural costs, based on a volume of 3.1 million vehicle sales a year.

Henderson's April 23 affidavit states that "a significant reduction" in the number of dealers will lead to GM competing more effectively in the market.

Copies of Henderson's affidavit this week, as well as the affidavits of Rob Toussaint, finance director of GM's US sales operations, and Robert Secrest, manager of the company's strategic network analysis, were sent to all dealer lawyers involved in arbitration.

As stated in GM's April 26 cover letter, GM "reserves the right" to present the affidavits in arbitrations. [via autonews]

Topics: gm, ceo, united states

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