GM dealership closure list not releasedMay 15th, 2009 - 11:40 pm ICT by John Le Fevre
GM has defied industry speculation it was set to terminate the franchise agreements of 1,100 of its dealers by instead putting them on notice to ship up, or shape out.
At a New York press conference Mark LaNeve, GM’s head of sales, service and marketing said the company had notified 1,100 of its dealers nationwide that the company did not expect to renew their contracts when they expired in October 2010.
According to LaNeve most of the dealerships who received the notifications were under-performing and loosing money. He said no dealership franchises will be terminated immediately and if those who received notification today improved their performance between now and October 2010 the notifications will be reviewed.
LaNeve said GM would not be releasing the list of dealerships that received notification letters and he expected more than 90 percent of the dealerships will be offered a chance to continue selling the GM brand after October next year.
With US car sales at a near 27-year low and no signs of immediate recovery in sight, GM has been losing 60 to 65 US dealers per month due to the unprecedented industry sales downturn.
A GM source is reported by Bloomberg’s as saying the 1,100 dealerships on the list currently hold about 120,000 vehicles worth about $US2.5 billion.
Prior to today’s press conference it had been feared GM would announce the almost immediate termination of franchise agreements as Chrysler did on Thursday, potentially putting another 52,800 people onto the unemployment line.
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Tags: bloomberg, car sales, chrysler, closure list, contracts, dealership franchises, downturn, franchise agreements, gm, gm dealership, industry speculation, mark laneve, marketing, money, notification letters, notifications, signs, unemployment line