GM to End Year with 4,500 U.S. Dealers
General Motors Co. will wind up with about 4,500 dealers in the U.S. later this summer following arbitration hearings mandated by Congress -- about 500 fewer than previously disclosed.
Before bankruptcy, GM had 6,150 dealerships. Once the restructuring is completed this summer, the automaker will have about 4,500, GM North American President Mark Reuss said today.
He made the disclosure during a business meeting with bankers and financial analysts at the company's Warren Technical Center. The group gathered to hear a briefing on the automaker's financial plans ahead of a public stock offering expected late this year.
"We are strategically aligning these franchise points so we don't have overlap," Reuss said.
When GM filed bankruptcy last year, it terminated franchise agreements with about 2,000 dealers, arguing that a smaller network would save money and boost the average number of sales, and profits, at remaining locations.
The move triggered complaints from dealers, many of whom said there was no rationale for the closures.
In December, Congress ordered arbitration hearings for rejected GM or Chrysler Group LLC dealers who wanted to pursue it.
About 1,160 GM dealers challenged the forced closings and the automaker offered to reinstate 666 of them. About 600 dealers accepted GM's terms and are being reinstated. The remaining dealers are continuing toward arbitration.
Reuss recently told the Associated Press that GM would have about 5,000 dealerships once the arbitration process concludes next month, but the automaker has cautioned the number changes every day as cases are concluded.
The lower 4,500 figure does not necessarily mean GM is winning arbitration cases, spokeswoman Ryndee Carney said today.
In March, GM said the dealership network size would be between 4,100 and 5,300, so the figure mentioned by Reuss today falls within that range, Carney said.
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