GM to force up to 1,200 dealers out

4/29/2009

DETROIT - General Motors Corp. told its dealers Tuesday that it will force 1,000 to 1,200 underperforming sites to close as the automaker tries to thin dealer ranks to make the remaining outlets more profitable.

GM told the dealers about the plan in a video conference, an anonymous dealer said. It is part of the firm's plan announced Monday to cut more than 2,600 dealers by 2010.

The dealership cuts will eliminate 137,330 jobs nationally, the National Automobile Dealers Association said.

It was unclear which dealerships would be shuttered, although one local dealer said the recession has meant most Toledo-area dealerships are probably considered underperforming by the firm's measurement standards.

GM brands are expected to be consolidated so that Chevrolet and GMC, for example, might be under one dealership roof.

GM is expected to begin talks with individual dealers next month.

Experts said consolidations could result in compensation for dealers who lose their franchise.

GM expects to lose 500 Hummer and Saturn dealers when those brands close or are sold, and it expects 400 dealers to close voluntarily.

An additional 500 would be consolidated into other dealerships, the dealer said.

GM said Monday that it also would drop its Pontiac brand and cut its dealership figures to 3,605 by 2010.

GM is living on $15.4 billion in federal loans and faces a June 1 government deadline to finish restructuring.

Meanwhile, a GM executive said the firm will sell or phase out the Saturn brand by the end of this year, nearly two years sooner than had been announced.