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GM To Restore 661 Dealers

by Jeff Prescott on

Cadillac dealershipThe year 2009 will be forever associated with the carpocalypse that saw the domestic auto industry shaken to its foundation, with Chrysler and General Motors seeking federal assistance as they restructured through bankruptcy proceedings. Chrysler trimmed its dealer body by 789 dealers, and GM declared it would not extend franchise agreements for 1,100 dealerships past October, 2010. Many dealers who had invested millions into their businesses and remained pillars in their communities were naturally upset and pursued appeals. GM heard the feedback, and it has said that it will restore about half those dealerships.

"The announcement by General Motors [Friday] of its intent to reinstate 661 dealers is a significant move forward in advancing the state of dealer relations,” said Ed Tonkin, chairman of the National Automobile Dealers Association. "We appreciate the good faith effort that GM is showing and hope that this carries forward in its continuing settlement and arbitration discussions with the remaining wind-down dealers."

Part of the motivation may be to avoid expensive arbitration and face the daunting task of completing such a process in just 120 days, to meet federally mandated deadlines, according to Automotive News.

For those dealers welcomed back into the fold this month, this decision is great news. Further, it will help preserve much-needed jobs and contribute to consumer convenience, providing sales and service in more communities. There is light at the end of the carpocalypse tunnel.

As GM rolls out several significant new products over the next 18 months, the remaining dealers will have fresh, promising product to build the sales momentum the “core” brands have established this calendar year.