GM Dealers Reinstate 600 Dealerships

By Yvette Yeon - bio | email

RICHMOND, VA (WWBT) - General Motors executives say it will keep 600 dealerships across the country from closing down. This is good news. Last year, GM told 2,000 dealerships it would revoke their franchise agreements as a part of its restructuring.

Dealerships have been fighting the decision since the announcement was made last year. They say they've been treated unfairly. About 1,100 dealers appealed the decision.

Michael Allen of the Virginia Automobile Dealers Association says the reinstatement is really good news for Virginia.

"Really sends a signal the market is stronger than they had anticipated and that those communities that were going to lose dealers are important to them," said Allen.

GM has said it needs to make the cuts to keep the remaining showrooms healthy. But Allen says the massive cut may have originally been a mistake GM is now acknowledging.

"The fact that General Motors who initially cut a large number of dealers recognized that they probably over cut and are reinstating dealers or offering to reinstate dealers," Allen said.

There's no telling at this time, which dealerships will remain in business. Dealers are currently in the dark as the news will come in a form of a letter.

"General Motors hasn't announced who will receive the letters those letters will be arriving next week and the dealers themselves don't know until they actually receive or in some cases don't," Allen said.

And while dealerships wait anxiously for the mailman to deliver the fateful letter, Allen says the outlook for the company is a positive one.

"Hopefully this is a good sign that the new management at GM is taking a new direction and is looking for ways to bring the company back to vitality," said Allen.

Allen says there are some concerns with the reinstatements. Like what are the stipulations or concessions possibly required. Dealerships can only hope for a fair and reasonable deal.

And for those dealers who don't get a reinstatement letter this week, Allen says all hope isn't lost. They will have the opportunity to go through arbitration.

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