GM has accelerated its restructuring as the impending June 1 deadline approaches along with Chapter 11 speculations. The carmaker has informed its dealers that it will expedite the close down of about 1,700 dealerships, an insider has said. At present, there are around 200 dealers that were shut down in this year's first quarter.
Although the closure of such large numbers of dealers was not confirmed by GM officially, a spokesman did confirm GM-dealers meetings.
The insider refused to comment on what happened behind the closed doors of the meeting. General Motors is counting on either the demise or sale of Saturn and Hummer.
If GM succeeds in getting rid of these liabilities, the dealerships for these brands will also follow. GM can get rid half of the 1,700 dealerships it intends to close from the Saturn and Hummer brands alone.
This will mean that there will be no buy-outs for the respective dealers together with those which GM will deem to be underperformers, whose franchise will ends by the first of June.
Dealership closures will take place, whether GM goes bankrupt or not. One of the suggestions offered for the survival of the dealers is for them to acquire Saturn.
This has already been done by an Oklahoma City based equity firm named Black Oak Partners which succeeded in rounding up a few dealers for Saturn and has even proceeded to make the proposal to GM this week.