Yesterday we got the details about the deep cuts in Chrysler’s dealership network. Today we have the news that General Motors notified 1,100 of its 6,000 dealerships that it is shutting them down. And that’s just for starters. Eventually, thestruggling automaker plans a 40% cut in its retail network.
Unlike the Chrysler dealers, which are being shut down in less than a month, the GM dealers have a bit of time. A GM spokeswoman said that the dealers receiving notice today are being told that their contracts will not be renewed in October 2010.
The company has told the Obama administration that it plans to cut its network down to 3,600 dealers by next year.
Much of the rest of the cuts will come from GM’s plans to sell or close four brands – Saturn, Hummer, Saab and Pontiac. Those dealerships have about 600 dealerships that do not include other GM brands. Business failures and purchases of dealerships by larger dealers has already shaved GM’s dealership ranks by about 300 dealership this year, Garontakos said.
GM Chief Executive Fritz Henderson said Monday that GM would work with the dealerships being cut to ensure an orderly wind down.
“As I look at it, it is work that will take place through ’09, and then we would wind down and handle the distribution of cars and make sure the customers are taken care of … make sure that dealers are reimbursed for warranties and that sort of thing,” Henderson said. “This is not a several week process.”
While many of the dealerships identified for closure could exit the business this year, [GM Spokeswoman] Garontakos said they can also stay active through September 2010.
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