GM sues some of its dealerships for failing to meet performance targets

Article by Christian Andrei, on July 24, 2012

Dozens of General Motors dealerships were told that they may keep their franchises but a few dealerships that had failed to meet their 2011 targets weren’t so fortunate. GM moved to take back their franchises. GM has filed federal lawsuits against at least eight dealerships, asserting that these stores didn’t meet the performance targets they agreed upon two years ago.

At that time, GM had entered settlements with around 120 dealerships. Instead of continuing with arbitration, GM decided to reinstate their franchises on a probationary basis. These stores were included in 700 other dealerships that filed for arbitration after GM hoped to achieve a wind-down as an element in its bankruptcy restructuring in 2009.

To sum it up, GM sought to eliminate 2,064 dealerships. Under the settlement deal, GM demanded that stores make new business plans and achieve individual targets for 2011, such as attaining sales targets. GM spokeswoman Ryndee Carney said that most of the dealerships have achieved their criteria and won’t have to relinquish their stores. Under the lawsuits filed in June and July, GM is exercising an option to buy the assets of the few that had failed to reach GM’s criteria.

Topics: gm, dealership, lawsuit

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