DETROIT – General Motors dealerships across the country, about 1,100 in all, will get FedEx letters Friday saying the American automaker does not see them as part of the company’s future.
It is part of GM’s previously-announced plan to cut the number of American stores from 5,969 to 3,600 by the end of 2010.
“We have said from the beginning that our dealers are not a problem but an asset for General Motors,” said Mark LaNeve, GM Vice President of Sales Service and Marketing in a
statement posted on the company’s Web site Friday. “However it is imperative that a healthy, viable GM have a healthy, viable dealer body that can not only survive but prosper during cyclical downturns. It is obvious that almost all parts of GM, including the dealer body, must get smaller and more efficient.”
General Motors will not publicly announce the dealerships it intends to close and will instead let individual dealership owners release the information as they see fit.
Scott Adams of
Adams Chevrolet in Belton told NBC Action News Friday afternoon he received a letter from GM notifying him that GM did no plan to renew his contract in October of 2010.
In most cases, existing franchise agreements run through October of 2010.
GM will also discuss the future of 470 Saturn, HUMMER and Saab dealers and will begin to work with remaining dealers about the company’s goal of dropping approximately 1,200 additional dealers by the end of 2010.
“In response, we are letting them know about our long term plans. GM’s viability plan calls for fewer, stronger brands as well as fewer, stronger dealers,” LaNeve said. “We have taken a very difficult step by identifying those dealerships we’d like to keep in the GM dealer network and those with whom we will have to wind down our business relationships.”
LaNeve clarified they will not close any dealerships Friday, but will begin speaking with the owners about plans to phase them out in coming weeks.
“Long term, GM should have fewer, healthier dealers, maintaining GM’s current high customer satisfaction ratings, with more sales per outlet,” he said.
The cuts come just a day after crosstown rival
Chrysler announced it was dropping 789 of its roughly 3,200 dealerships by around June 9.
The GM dealer cuts are likely to have a much greater impact than Chrysler's. While many Chrysler dealers also sell other brands and will stay open after losing their franchises, a large number of GM dealers sell only GM vehicles. So if their franchises are revoked, they run a greater risk of closing for good.
