1,100 GM dealers receive closure notification today

May 15th, 2009 - 10:16 pm ICT by John Le Fevre  

General Motors Just one day after 789 Chrysler dealers across America were told they were no longer required, General Motors (GM) dealers nationwide are today waiting for mail deliveries to see if they too have become redundant.

Up to 1,100 of GMs almost 6,000 US dealers are expected to receive their marching orders today, with the company scheduling a press conference at midday EDT.

The cuts are part of a plan the company announced last month to reduce dealership numbers by 42 percent to 3,600 by the end of next year.

A GM source is reported by Bloombergs as saying the 1,100 dealerships currently hold about 120,000 vehicles worth about $US2.5 billion of inventory.

Up to April 24, 2009, GM had received US$15.4 billion in loans from the US Treasury Department under the Troubled Assets Relief Program (TARP), but a government-set deadline means GM faces probable bankruptcy by June 1 if it fails to complete restructuring and improve viability in accordance with the demands of US President Barack Obama.

If the same figure of 48 employees per dealership that was quoted by the National Automobile Dealers Association is applied to the GM closures, today mail could signal up to an extra 52,800 people loosing their jobs in the weeks ahead.

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