GM Gives 600 Dealerships New Lease on Life

(AP)  General Motors Co. will reinstate more than half the dealerships it targeted to drop from its network.

GM executives said Friday that about 600 dealerships out of the 1,100 seeking to stay with GM will receive letters giving them the option to remain with the automaker.

The Detroit automaker last year told 2,000 dealerships it would revoke their franchise agreements in October 2010 as part of its restructuring. The company has said it needs to shrink the number of showrooms to keep the remaining ones healthy.

The dealerships, who say they have been treated unfairly, have been appealing the decision.

The cuts to GM's 6,000-dealer network were designed to compensate for much lower demand for cars and trucks, but some dealers have argued that lots that are still profitable are at risk, and that the automaker hasn't offered enough details about how it's choosing which businesses to shutter.

GM and Chrysler, which has slashed 789 dealers, have said they would reconsider the cuts. The decision was a compromise meant to avoid federal legislation that would require that the showrooms be kept open.

Under the revised plans, dealerships would get face-to-face reviews, binding arbitration and faster payments to help dealers slated for shutdown.

Congress-brokered talks between dealer groups and the automakers began in September. But those talks stalled over disputes about the review process for targeted dealerships and other issues. Looming over the fight has been the threat of federal legislation to deal with the closures. Lawmakers warned that if a deal wasn't reached, that legislation would move forward.

The White House has opposed the legislation over concerns that it could hurt GM's and Chrysler's efforts to rebound from their government-led bankruptcies.
NEW YORK

[wdh3007]

GM or in this case Government Motors Gives 600 Dealerships New Lease on Life now that the govt ownes them?

[stevex47]

Look how some of the nutjobs are mad at Obama for success at saving jobs. Very American of you to hope for failure.

Um, watchdog, the government didn't close them, GM did. However, the goverment did help save them.

Obama success sucks doesn't it?

[magnumdr]

Good. I will never buy a car that is not an American product. At least the folks at GM won't lie to us about a problem with there cars just to save money like Toyota is doing right now.

[djberson]

Good for you Polock, go rearend an innocent American car driver in your Toyota. By the way, the jews forgave Porshe VW and Mercedes, but you cant forgive a company that was purged of the management you whine about.

[north1949]

Now that you've totally trashed Toyota in order to see that GM survives as a government car company. Why is it that none of the supposed problems with Toyota vehicles have shown up in Canada or Europe? Because the USA needed to denigrate Toyota to boost sales for GM and Chrysler, of course!!

[askagain]

Perhaps it is a little deeper than that. The U.S. could not nationalize the automobile industry with successful foreign car manufacturers still operating. Having companies like Toyota and Honda still operating in the United States shrinks the government's ability to control the automobile industry. Destroy the foreign competition, and the job becomes easier. Look out Honda. You may be on the chopping block, too.

[watchdogtexas]

Another government debacle. They rushed to judgment to close these dealers, and now they now that some were making money. Umm, and Obama wants to run health care. God help us!

[WitchBroom]

They have financially weakened these dealer-owners and caused such disadvantages for them by previously stripping them of their franchise and the adverse publicity that their rebirth, and ultimately their survival, is very much in question. If I was one of these dealers I would think twice about the proposition of re-opening. With so many hard hit households struggling to hang on now and with stagnant or shrinking wages and slow job growth while the cost of living continues to rise, one wonders who will be able to afford a new vehicle for several years to come.

[jsachse]

Their whole approach was just wrong...I've got some good friends that own a dealership. They're supposed to lose the franchise Oct 2010 but they weren't allowed to order any new vehicles as of June last year when they received the letter. They've survived by selling used cars and buying new cars from other dealers. I really hope they get to keep their franchise...they're good people.

[ajvw]

let me see if I understand. GM needed to close these dealerships to return to profitablity but now that the government owns most of GM we can reopen them because it doesn't matter if we lose money.