"A leaner, more profitable dealer network with higher annual vehicle sales per dealership is essential to reducing GM's staggering dealer support costs and a critical component of helping to ensure the viability of New GM," the manufacturer said in the filing.
The dealerships subjected to closure were selected based on several criteria. Thus, the main targets are those who sold less than 50 vehicles a year, who have not been profitable for three consecutive years and, of course, those who sold brands other than GM in one store and undermined the sale of GM vehicles.
In mid June, GM announced it has completed the restructuring process of its dealership network. According to the company, only 30 of its dealers have declined to sign agreements to either shut down or continue with the new GM. The 30 have been put, together with the old GM, into bankruptcy and will be terminated immediately.
Out of the 4,100 dealers who received the revised participation agreement, nearly 100 percent have signed. The first 70 contracts to be terminated involve 70 stores owned by 38 dealers in South Carolina, Alabama and Oklahoma.
On Friday, GM is expected to complete the sale approved on Sunday by Judge Robert Gerber.
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