Friday, Jul 29, 2016
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Automotive

GM still not identifying which dealers get new life

LOS ANGELES - Despite weeks of anticipation since General Motors Co. announced it would keep hundreds of dealers targeted for closing, it is still not clear which will be granted a reprieve.

The automaker is deep in negotiations with some dealers but is not talking to others, according to attorneys and auto-industry executives familiar with the talks.

Details have been particularly sketchy because GM and the dealers have signed confidentiality agreements. Dealers don't want customers to know they might close, which could chase away potential buyers of vehicles still on the sales lot, and GM declined to identify dealers, saying it was leaving it up to them to disclose if they were being reinstated or not.

Dealers in the Toledo region haven't said if they are to be reinstated. Several GM dealers across northwest Ohio and southeast Michigan were among the 1,300 slated to lose their franchise agreements. GM officials said 1,160 requested arbitration. Allen Chevrolet Cadillac in Monroe filed for arbitration, but it is not known if it has been offered reinstatement.

Knapp Motors in Blissfield, Mich., Ed Schmidt Auto Group in Toledo, and Dunn Chevrolet in Oregon lost at least one of their franchises but retained others. It was not known if any has been offered reinstatement.

Individuals familiar with the negotiations said GM was starting to make concessions to keep some of the stores open in an attempt to avoid hundreds of arbitration hearings nationwide.

Chrysler Group has about 400 dealers using arbitration to appeal the loss of their dealerships.

"We are seeing positive movement from GM. They want to move on and not be at war with dealers, but it is just night and day with Chrysler," said Peter Welch, president of the California New Car Dealers Association.

The automakers sought to shed what they considered to be about 3,000 excess dealers as part of bankruptcy reorganizations last year, an effort to bring their franchise networks into better balance with declining car sales. Closing unprofitable and poorly performing franchises was expected to channel business to the stronger dealers.

But dealers and their supporters complained, contending that such businesses were important to the economies of their local communities.

Congress stepped in and passed legislation requiring the automakers to set up an arbitration process that would be completed by July 15.

Chrysler is sticking to its plans to shutter showrooms that don't sell all three of its brands - Chrysler, Dodge, and Jeep.

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