NADA on GM Dealership Cut: Sad and Disappointing

Following GM's announcement that it will reject around 1,100 dealerships by the end of 2010, the National Automobile Dealers Association described the decision as sad and disappointing, especially because most dealers are "family-run businesses that have been loyal partners with GM for multiple generations."

Furthermore, NADA claims no less than 63,000 employees will be affected by the decision compared to "only" 40,000 people in Chrysler's case - Chrysler also announced last week that it will eliminate 789 dealerships as part of a broader campaign to reduce costs in this area.

"We view GM's action with a profound sense of sadness and disappointment. GM's decision comes through no fault of the dealers, who are, in many cases, family-run businesses that have been loyal partners with GM - through good times and bad - for multiple generations,"
NADA said in a statement.

"NADA fully expects GM to honor all its obligations to the affected dealers, whether or not they decide to wind down their operations. It's critical for GM to treat each affected dealer fairly and equitably. NADA will work aggressively on all fronts with regard to assisting these dealers during these historically challenging times."

General Motors announced a few days ago that it will start eliminating dealerships, just as mentioned in the viability plan submitted to the government, and reduce the overall count from 5,969 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.”
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About the author: Bogdan Popa
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Bogdan keeps an eye on how technology is taking over the car world. His long-term goals are buying an 18-wheeler because he needs more space for his kid’s toys, and convincing Google and Apple that Android Auto and CarPlay deserve at least as much attention as their phones.
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