posted by GM Dog on Aug 8
Before General Motors declared bankruptcy last year, it had about 6,000 dealerships. The network is undergoing a restructuring following a mandated arbitration by the US Congress. GM is expected to have 4,500 dealers to end the year.
The plan was disclosed during a meeting with financial analysts and bankers. The executives gave a briefing with regard to the company’s plans as it may offer public stocks before 2010 closes.
The carmaker ended their agreements with roughly 2,000 dealers when it went into bankruptcy in 2009. The logic is that a smaller network will allow GM to save some money and beef up their sales and earnings at their remaining locations.
Some 1,160 dealers argued though against the rationale of the move. The car manufacturer reinstated 666 of them with 600 of these dealers accepting the terms offered by GM while the rest are pushing for arbitration.
According to GM execs, the company is planning to go down to around 4,000 showrooms in future. This is way behind the earlier estimates of around 4,100 through 5,300 dealers.
Even if General Motors keep 5,300 dealers in their roster by the end of the year, it will still be a big drop from their status last year. The number of dealers of GM though still dwarfs the number of Japanese carmaker Toyota which is pegged at 1,500.