GM Has 4,500 Stores After Winning 63% of Arbitration Cases

WASHINGTON - General Motors Co. prevailed in 39 of its arbitration cases and lost 23 to rejected dealerships as it scales down to about 4,500 stores by November, GM spokeswoman Ryndee Carney said.

GM announced final results of a process that began with enactment of a federal arbitration law in December and ended with final decisions handed down last month on claims by dealers tagged for elimination during the company's restructuring, reported Automotive News.

Most of the 1,176 arbitration claims filed in January never reached a decision, the company said in a statement. GM offered letters of intent that spelled out conditions for reinstatement to 702 dealerships or 60 percent of those that filed claims.

With 23 dealerships prevailing in arbitration, GM offered letters of intent to a total of 725 stores, Carney said in an interview. That's 62 percent of the dealerships filing claims.

Most if not all recipients of letters of intent have signed them, Carney said. These stores can start selling cars as soon as they meet the conditions in the letters.

“A strong, profitable dealer network selling and servicing the world's best cars and trucks is a genuine market advantage,” GM North America President Mark Reuss said in the statement.

GM also said today that it had reached 408 individual resolutions with dealers that filed arbitration claims.

These resolutions consist of settlements, an undisclosed number of dealership continuations that will receive letters of intent, and claim withdrawals and dismissals, Carney said.

Most of the 408 resolutions involve dealer terminations, GM said.

Still, dealer lawyers have said GM paid cash settlements in dozens of these cases -- sometimes as much as several million dollars.

During the summer of 2009, GM notified 2,064 dealerships of plans to terminate at least one of their franchises by October 2010. GM's goal was to pare its dealer network from 6,049 stores to about 3,600.

That network is now likely to be about 25 percent larger than originally planned, with about 900 more stores -- making a total of about 4,500.

While GM declined to give a dealership breakdown, Carney did provide a breakdown by franchise for the new network.

In November, there will be about 3,100 Chevrolet franchises, 2,100 Buick franchises, 1,750 GMC franchises and 925 Cadillac franchises, she said.

About 1,000 of the continuing stores are scheduled for “a major facilities upgrade” by the end of this year, the statement said. Included in the upgrades will be work areas with phone and laptop computer outlets, Wi-Fi and a cafe area with refreshments.