GM reaches agreement with dealers

• Source: xinhua
• [08:58 June 10 2009]
• Comments

The largest US automaker General Motors Corp. reached a deal with the National Automobile Dealers Association (NADA) on franchise terms for the more than 3,500 dealers, reports reaching here said Tuesday.

GM, which filed Chapter 11 bankruptcy for court protection on June 1, plans to keep about 3,500 dealers after it exits bankruptcy, GM and NADA said Monday night.

NADA issued a statement late Monday, saying it "supports GM's amendments to the Participation Letter Agreement."

On Friday, a House committee will take up the issue of GM and Chrysler's dealership closures. In its Chapter 11 bankruptcy filing Monday, the company said it would immediately try to cut 2,100 dealerships, far more than the 1,100 it had originally announced.

GM's move to eliminate about 40 percent of its US dealership network will result in 137,330 employees losing their jobs and eliminate an estimated 1.7 billion US dollars in sales tax revenue for state and local governments, according to NADA.