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Automotive Industry
AUTOS: GM Offering To Reopen Rejected Dealers
More than 600 dealerships to get opportunity for reinstatement under new plan.
Bob Golfen  |  Posted March 05, 2010   Detroit, MI
General Motors will offer more than 600 closed dealerships a second chance. (Photo: Bob Golfen)
General Motors is planning a new deal for more than 600 rejected dealers, offering reinstatement and stepping back from an earlier plan to reduce its total dealerships by 40 percent, the automaker announced Friday.

The dealerships, which come from the ranks of the 1,160 that sought arbitration to win back their franchises, will receive letters of intent from GM starting next week that outline a timeline and the conditions they must meet for reinstatement.

“We are eager to restore relationships with our dealers, and get back to doing what we do best – selling cars and taking care of customers,” said Mark Reuss, president, GM North America. “The arbitration process creates uncertainty in the market. We believe issuing these Letters of Intent is good for our customers, our dealers and GM.”

Most of the dealers who receive the letters are expected to meet the criteria for reinstatement, Reuss said.

The remainder of the dealers will receive settlement agreements for closure. GM had planned to close 2,000 franchises as part of its recovery from last year’s bankruptcy, in which the automaker retracted from eight brands to four – Chevrolet, Cadillac, Buick and GMC.

GM will now wind up with between 4,500 and 5,000 nationwide dealership when the process is completed, compared with more than 6,000 before the closures.

Once the reinstated dealerships get the OK from GM, they can begin ordering cars for their inventory.

Meanwhile, Chrysler is still fighting arbitration bids from about 400 of its 789 closed dealerships.

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