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GM to reinstate 600 dealerships nationwide

General Motors Co. will reinstate 661 dealerships it targeted to drop from its network.

GM executives said Friday that the 661 dealerships out of the 1,100 seeking to stay with GM will receive letters giving them the option to remain with the automaker.

GM last year told 2,000 dealerships it would revoke franchise agreements in October 2010 as part of its restructuring. The company has said it needs to shrink the number of showrooms to keep the remaining ones healthy.

In late January, at least four Long Island car dealers were among about more than 1,000 nationally who sought binding arbitration to reverse the losses last year of their General Motors Co. or Chrysler Group Llc franchises.

GM executives said Friday that 661 dealerships — more than half
of the 1,100 seeking to stay with the automaker — will receive
letters giving them the option to remain open. The company said it
made the move because it would not have enough time to negotiate
with all 1,100 dealerships within a four-month window imposed by
the federal government.

“By doing this we save a lot of time, energy and dollars,”
said Jim Bunnell, GM general manager of network support, saying the company wished to avoid a “very large arbitration process.”

General Motors notified 2,000 dealers nationally last year that they'd be dropped effective in October. The dealerships were not identified, nor was the number on Long Island ever specified. The Island had more than 40 GM stores in January 2009.

The cuts to GM's 6,000-dealer network were designed to compensate for much lower demand for cars and trucks, but some dealers have argued that lots that are still profitable are at risk, and that the automaker hasn't offered enough details about how it's choosing which businesses to shutter.

GM and Chrysler, which has slashed 789 dealers, have said they would reconsider the cuts. The decision was a compromise meant to avoid federal legislation that would require that the showrooms be kept open.

Under the revised plans, dealerships would get face-to-face reviews, binding arbitration and faster payments to help dealers slated for shutdown.

Congress-brokered talks between dealer groups and the automakers began in September. But those talks stalled over disputes about the review process for targeted dealerships and other issues.

Looming over the fight has been the threat of federal legislation to deal with the closures. Lawmakers warned that if a deal wasn't reached, that legislation would move forward.

The White House has opposed the legislation over concerns that it could hurt GM's and Chrysler's efforts to rebound from their government-led bankruptcies.

This story was supplemented with a report by Newsday staff writer Tom Incantalupo.

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