After Chrysler, GM Starts Killing Dealers Too

Just as we told you in a previous report, as part of a broader campaign to reduce costs and tackle the economic recession, General Motors plans to get rid of more than 1,000 dealerships. Well, the moment has arrived and the American automaker today announced that, just like it mentioned in the viability plan it has submitted to the government, approximately 1,100 dealers will be rejected. The process starts today, the company said in a release, with the efforts aiming to reduce the number of dealerships from 5,969 stores today to 3,600 by the end of 2010.

“We have said from the beginning that our dealers are not a problem but an asset for General Motors,” said Mark LaNeve, GM Vice President of Sales Service and Marketing. “However it is imperative that a healthy, viable GM have a healthy, viable dealer body that can not only survive but prosper during cyclical downturns. It is obvious that almost all parts of GM, including the dealer body, must get smaller and more efficient."

“In response, we are letting them know about our long term plans. GM’s viability plan calls for fewer, stronger brands as well as fewer, stronger dealers. We have taken a very difficult step by identifying those dealerships we’d like to keep in the GM dealer network and those with whom we will have to wind down our business relationships,” LaNeve said.

However, the company hasn't unveiled the names of the dealerships picked to be rejected and, once again, emphasized that all dealers will receive their very own chance to continue operations. Furthermore, it confirmed that all dealerships will be updated with info related to Saturn, Hummer and Saab, three brands that have been often linked with discontinuation.

“We are not terminating any dealerships today,” LaNeve clarified, “We will be talking to all of our dealers over the next few weeks, letting them know now in the spirit of open communication, so they are advised well in advance, about our long-term plans and their role in them. Long term, GM should have fewer, healthier dealers, maintaining GM’s current high customer satisfaction ratings, with more sales per outlet.”