Saturday, May 16, 2009

GM not renewing 1,100 dealers' leases

GM seeking to reduce the number of dealers from 6,200 to roughly 3,600
By Christopher K. Hepp - Inquirer Staff Writer

Notifications came a day after Chrysler, which is in bankruptcy, announced it was cutting ties with 789 of its 3,200 dealers, including 11 in the Philadelphia region.

The moves by both automakers are designed to bolster performance by reducing the number of competing dealerships.

GM is seeking to reduce the number of its dealers from about 6,200 to roughly 3,600 by the end of 2010. The remaining cuts will come from closed Saturn and Hummer dealers, along with 400 dealers that the company expects will close voluntarily. An additional 500 would be consolidated into other dealerships.

GM is doing so as part of a restructuring aimed at saving the automaker. It has received $15.4 billion in aid from the federal government and faces a June 1 government-imposed deadline to dramatically reduce costs or file for bankruptcy. Chief executive officer Fritz Henderson said yesterday that bankruptcy was "probable."

See: GM not renewing 1100 dealers' leases

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