Another round of dealer cuts imminent at GM


In its original restructuring plan GM announced it will reduce its 6,200 dealers to around 4,600 by 2010

In its original restructuring plan GM announced it will reduce its 6,200 dealers to around 4,600 by 2010

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Just a couple of weeks ago General Motors revealed that it would be cutting ties with over 1,100 dealerships, and the bad news keeps coming for dealers as the struggling automaker is expected to cut a further 450 dealerships in the coming months.

Many dealerships are under franchise agreements with GM that are expected to finish late next year - at which point around 450 dealers will most likely not have their contracts renewed. The dealerships facing the axe from GM have been chosen because they "have very specific issues", the automaker’s sales chief Mark LaNeve revealed to Automotive News. These issues include the fact that certain dealerships may have been exclusively stocking the now-defunct Pontiac brand, or be underperforming in regards to sales targets.

This would bring the total cut in dealerships to over 1,500 since May 15th of this year. Publicly, however, GM is not admitting that the dealership cuts are that large, with LaNeve claiming that only around 200 more dealerships are likely to be cut. Whatever the final figure is, it’s expected that GM will talk to dealerships that it’s planning to cut on Monday - the same day the company is expected to initiate one of the biggest bankruptcy cases the U.S. has ever seen.

More dealerships are expected to go when GM sells off the flailing Hummer and Saturn brands, as well as possibly Saab. In total, the loss of these three brands is expected to cause a further fall in dealer numbers by around 500.

 
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