GM makes huge dealer cuts, follows move by Chrysler

May 16th, 2009 - 1:06 am ICT by IANS  

Washington, May 15 (DPA) General Motors Corp, the US auto giant nearing bankruptcy, Friday announced massive cuts in its dealership network as part of a drastic effort to cut costs and survive the global recession.
GM, the largest US carmaker, has informed 1,100 of its nearly 6,000 dealers that their contracts would not be renewed. The Detroit-based maker plans to reduce its number of outlets to 3,600 by the end of 2010.

“It is obvious that almost all parts of GM, including the dealer body, must get smaller and more efficient,” Mark LaNeve, GM’s vice president of sales and marketing, said in a statement.

GM’s smaller competitor Chrysler LLC, which is already in bankruptcy, announced a similar wave of cuts Thursday. Chrysler said it would reject contracts with 789 of its nearly 3,200 outlets.

GM is rushing to meet a government-imposed June 1 deadline to restructure its operations and settle outstanding debt with its creditors, or be forced into bankruptcy. Despite the marathon efforts, chief executive Fritz Henderson has said bankruptcy is “probable”.

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