GM to cut 1,000 dealers

• Source: The Global Times
• [18:34 May 14 2009]
• Comments

By Shi Jierui

According to Dow Jones, General Motors Corp. (GM) will send warning letters to nearly 1,000 auto dealers by Friday after which GM will make a 40 percent cut in its dealers.

Sources told Automotive News that the letters would outline how the dealerships have failed to meet the automaker's expectations.

GM has said it plans to cut about 2,600 dealerships by the end of 2010. This move is part of the restructuring efforts after the White House gave GM 60 days for a bankruptcy filing.

Last year, GM had 6,246 US dealerships. But at the end of this year, 1,000 to 1,200 "underperforming" dealers will be cut.

GM spokeswoman Susan Garontakos said late Thursday, "Most dealers know who they are if they're underperforming in CSI, profitability, capitalization and sales effectiveness. There are scores they need to meet or exceed to be retained."

GM says it will not publish the names of the dealers.

In total, GM and Chrysler are going to cut as many as 3,000 US dealers.