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GM to Allow Early Dealer Termination, No Penalties

American manufacturer GM announced it has decided to allow its rejected dealers to close before january 1, 2010, should they desire so, without applying any penalties. "We're trying to be as accommodating as possible with them," GM spokeswoman Susan Garontakos was quoted as saying by Autonews. "We are starting the process with them."

The change of heart from GM comes after the extremely successful Car Allowance Rebate System has nearly depleted the dealer's inventories. Initially, the dealers were supposed to remain in business until January 1 without ordering any more vehicles, in exchange for a payment from GM. Yet now, some 50 to 60 percent of the dealers find themselves in the position to ask for early wind-down or risk operating for months with nothing to sell.

"They have to request an early wind-down," Garontakos said. "We won't go out there and ask them or pressure them. But if they request it, we are working with them on that."

In mid June, GM announced it has completed the restructuring process of its dealership network. The 1,300 dealers targeted for closure are being offered in between $100,000 to $1 million to close up shop, with the less fortunate, Pontiac-only dealers to receive in between $10,000 and $200,000.

The restructuring process continues, as GM is in the process of reducing the number of GM dealers in the U.S. from 6,000 this spring to approximately 3,600 by the end of next year. As for CARS, should the extra $2 billion be approved by the Senate, it will definitely add to the number of dealers asking for faster wind-down.
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About the author: Daniel Patrascu
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Daniel loves writing (or so he claims), and he uses this skill to offer readers a "behind the scenes" look at the automotive industry. He also enjoys talking about space exploration and robots, because in his view the only way forward for humanity is away from this planet, in metal bodies.
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