GM will wind up with about 4,500 dealers in the U.S. later this summer

Article by Christian Andrei, on August 27, 2010

Following arbitration hearings mandated by Congress, General Motors Co. will end up with about 4,500 dealers in the US later this summer (about 500 fewer than reported previously).

Before GM entered bankruptcy, it had 6,150 dealerships but as soon as restructuring is completed this summer, it will wind up with about 4,500.

In a business meeting with bankers and financial analysts at GM's Warren Technical Center, North American President Mark Reuss said that to avoid any overlap, the company is "strategically aligning these franchise points."

The group gathered to hear a briefing on GM's financial plans ahead of a public stock offering that is believed to take place late this year. As GM filed for bankruptcy last year, it ended franchise agreements with about 2,000 dealers. It wanted a smaller network to save money and to increase the average number of sales, and profits, at the dealerships left.

These terminated dealers filed complaints, arguing that there was no rationale for the closures. Last December, Congress ordered arbitration hearings for rejected GM or Chrysler Group LLC dealers.

A total of 1,160 GM dealers disputed the closures and GM later made an offer to reinstate 666 of them, 600 of which agreed to GM's terms and are being reinstated. The remaining dealers are proceeding with the arbitration. In an interview with the Associated Press, Reuss said that GM will have about 5,000 dealerships with the conclusion of the arbitration process next month.

However, GM warns that the number will change each day as cases end. Spokeswoman Ryndee Carney wanted to clarify that the lower 4,500 figure does not necessarily mean that GM is winning arbitration cases. [via autonews]

Topics: gm, dealer, united states

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