GM closing 1,100 dealerships

May 15, 2009 4:34:42 PM PDT
General Motors is telling its franchises they will be terminated late next year.Eleven hundred dealerships across the country will have to close.

General Motors is still not publicizing what nonrenewal notices it sent to various dealerships around the area, but ABC7 did contact several and most said they had not received that letter.

ABC7 found at least one that did receive the letter. Roseland Auto Sales on Chicago's South Side will go out of business presumably after 98 years. Another dealership, though, made the cut. Those at that dealership say the Pontiac name plate may be going away but they're not.

"It's always a bad thing. But this is a giant step into possibly surviving this auto crunch right now," said Joe Kendall, Ettleson Buick Pontiac GMC Cadillac.

G.M. promised to notify 1,100 dealers on Friday if they would still be allowed to do business with General Motors.

In the meantime, GM plans to cut 2,600 of its 6,200 dealerships, and the notifications come one day after Chrysler notified nearly 800 dealers that they must close.

"The manufacturers still have to provide a lot of support to the dealerships, the marketing costs, delivering cars. There are still incremental costs to get dealerships up and going," said Jason Tyler, Ariel Capital Management.

G.M. officials placed dealerships on the list because they said they were underperforming and had low sales, just a day after Chrysler said goodbye to nearly 800 of its dealers.

"In these times right now, I don't understand why General Motors is doing this. There are a lot of things I think that could have been done different. I mean, the strong dealers will survive, absolutely. But it could really be anybody," said Mike Helmstetter Gillespie Chevrolet.

The company subpoena also expected to shed 500 dealers, those in the labels it plans to close.

"I'm a G.M. man, all my life. Even though I worked for Ford, I like G.M. better. If I had the money to spend, I'd want that Camaro," said Johnny, customer.

G.M. says it's going to honor the warranties for customers regardless of where they bought the vehicles from. G.M. said this is more of an elimination phaseout than the Chrysler plan.


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