GM, Dealers Reach New Agreement

General Motors and the National Automobile Dealers Association reached a new agreement on Monday night over the franchise terms for the dealers the American manufacturer plans to keep in business after stepping out of Chapter 11 protection. In a broader attempt to reduce the count of US dealerships, General Motors earlier this year announced a measure that would close up to 1,100 dealerships across the country. Overall the company plans to reject contracts of around 2,400 to 2,700 stores.

However, GM and the NADA have finally reached an agreement on Monday and, according to Mark LaNeve, GM North America Vice President, nearly 90 percent of dealers have signed or verbally agreed to the participation agreements.

Here is the General Motors statement attributed to Mark LaNeve and issued after the meeting between the American manufacturer and NADA officials:

To date, we are very pleased with the overall dealer response to the proposed agreements. Nearly 90 percent of GM dealers have signed or verbally agreed to the participation agreements, while almost 75 percent have done so with the wind-down agreements. In both cases, we expect to have at least 95 percent of the signed documents on hand ahead of our Friday, June 12 deadline.

While these efforts are extremely difficult for all involved, we believe that the GM dealers moving forward with the company strongly support actions to improve their long-term competitiveness and business opportunities.

We value the input and relationship with all of our dealers and their hard-working representatives from NADA and the NDC. We will continue to evaluate all GM dealers against a common set of performance standards to ensure that our selection process is fair and robust. It is important to remember that despite the difficulty of these circumstances, the majority of GM dealers support and recognize the necessity of these changes to our dealer network.