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GM Shutting Down 1,100 Dealers

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Source: http://www.bloomberg.com/apps/news?pid=206...&refer=home

GM Is Said to Plan Shutdowns for 1,100 U.S. Dealers

General Motors Corp. is sending termination notices today to 1,100 U.S. dealers with about $2.5 billion in unsold vehicles as the automaker starts shrinking its retail network, a person familiar with the matter said.

The dealers hold about 120,000 autos of various brands, said the person, who asked not to be identified because GM hasn’t announced details yet. Mark LaNeve, GM’s North American sales chief, is set to brief reporters at noon New York time.

The closings are GM’s first step toward paring U.S. dealers to 3,600 from 6,200 by the end of next year as it faces a probable bankruptcy by a June 1 deadline. With fewer outlets, the survivors each may be able to sell more cars at higher prices, boosting profit, the person said.

“A concern of all dealers would be if the market value of vehicles were to decline because terminated dealers would be desperate to sell,” said Jim Eagan, a partner at consulting firm Plante & Moran in Southfield, Michigan.

Eagan said he hoped that GM would force the remaining franchisees to purchase inventory from stores being closed. Bankrupt Chrysler LLC took similar steps when it announced the shutdown of 789 dealerships yesterday.

Peter Ternes, a GM spokesman, declined to comment about the company’s plans. CNBC reported that GM’s letter to terminated dealers says the automaker’s cuts aren’t final yet, without saying where it got its information.

‘Emotional Day’

“It’s quite an emotional day,” said Wyman Williams, 61, who was waiting to learn whether his Williams Motors in Commerce, Texas, is on the closings list. “We’ve been here 40 years and what happens today is really important.”

He said he filed for Chapter 11 protection on April 1 for his Chevrolet-Pontiac-Buick store. “It was a necessity, but it worked out as a defensive move,” Williams said. “There’s a judge between GM and me.”

GM fell 1 cent to $1.14 at 11:08 a.m. in New York Stock Exchange composite trading. The shares have tumbled 95 percent in the past year.

GM is hoping for an orderly wind-down of the affected dealers over the next year or so, the person said, meaning they would close when their inventory is gone.

Dropping Brands

Today’s shutdowns are in addition to the approximately 500 dealers being shed as GM disposes of its Hummer, Saturn and Saab brands and drops Pontiac. GM has said it expects some dealers to leave voluntarily.

In contrast to Chrysler, which waited until it filed bankruptcy to cancel dealerships, GM is taking steps to reduce its retail network now, saying it still hopes to avoid having to restructure in court. Still, Chief Executive Officer Fritz Henderson said yesterday that bankruptcy is “probable.”

GM is trying to shave operating costs and shrink debt and union-retiree obligations by $44 billion. The company is surviving on $15.4 billion in U.S. government loans.

GM’s 8.375 percent bonds due in July 2033 fell 0.3 cent yesterday to 4.5 cents on the dollar, a record low, according to Trace, the bond-pricing service of the Financial Industry Regulatory Authority. The yield was 175 percent. The bonds traded at 74.4 cents on the dollar a year ago.

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Not good, I doubt we will get a $h! list. I just want to know if my small town dealer got the shaft. If they did, I will be pretty pissed.

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Not good, I doubt we will get a $h! list. I just want to know if my small town dealer got the shaft. If they did, I will be pretty pissed.

Your right, this is going to suck for a lot of small town and family dealers.

Chris :iroc-dragster:

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Your right, this is going to suck for a lot of small town and family dealers.

Chris :iroc-dragster:

Yeah I just don't want to call them and ask...

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well i've gotten word that the dealership i bought my truck from is probably going under. i want to call the service department and rub it in. maybe even shake their hands as they are going out the door. screw people over for so long and thats what you get.

there were several in the department that got busted for meth earlier in the year.

http://www.independentmail.com/news/2009/j...ets-16-arrests/

plus the manager is a total jerk.

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As of about noon today the dealership I work at is safe. We did not receive the letter, but we have heard one within about 20 miles of us has. We are a small dealership, but serve a largish rural area.

Edited by thedriver
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As of about noon today the dealership I work at is safe. We did not receive the letter, but we have heard one within about 20 miles of us has. We are a small dealership, but serve a largish rural area.

Can I ask what dealer is going under that you heard of?

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Can I ask what dealer is going under that you heard of?

I best not say, my info is thirdhand. Our driver talked to someone at this dealership who signed for an official letter. May be bogus...

Edited by thedriver
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As of about noon today the dealership I work at is safe. We did not receive the letter, but we have heard one within about 20 miles of us has. We are a small dealership, but serve a largish rural area.

What are the specific vehicles that your dealership sells? Just wondering if there is any overlay with the one that is being closed 20 miles away.

If anyone finds the $h! list please post it as I am interested in knowing myself.

As of 11am seattle time, I called up the street and the Lee Johnson Chevorolet dealership is safe, but there is a smaller one only 10 miles up the road in Bothell that I suspect will close as it is only a third the size of Lee Johnson. I also called the Kirkland BPG dealership and they said they are safe and staying open. So at least both Kirkland Dealerships are safe.

It was nice to see that after all the closings last winter that the lone Kirkland Chrysler, Dodge & Jeep dealership here is staying open. :)

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I best not say, my info is thirdhand. Our driver talked to someone at this dealership who signed for an official letter. May be bogus...

I understand... I just want a $h!LIST. I just fear alot of small towns will be hurting after all this from GM and Chrysler.

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What are the specific vehicles that your dealership sells? Just wondering if there is any overlay with the one that is being closed 20 miles away.

If anyone finds the $h! list please post it as I am interested in knowing myself.

As of 11am seattle time, I called up the street and the Lee Johnson Chevorolet dealership is safe, but there is a smaller one only 10 miles up the road in Bothell that I suspect will close as it is only a third the size of Lee Johnson. I also called the Kirkland BPG dealership and they said they are safe and staying open. So at least both Kirkland Dealerships are safe.

It was nice to see that after all the closings last winter that the lone Kirkland Chrysler, Dodge & Jeep dealership here is staying open. :)

We are a (soon to be) Buick-GMC dealer. The one I heard about is the same, but in a large Metro area. Both dealers have a long history. I will post more if and when I have confirmations...

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We are a (soon to be) Buick-GMC dealer. The one I heard about is the same, but in a large Metro area. Both dealers have a long history. I will post more if and when I have confirmations...

Well I am glad you guys will be okay, can I ask, how many new cars do you have on your lot?

Edited by gm4life
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We are a (soon to be) Buick-GMC dealer. The one I heard about is the same, but in a large Metro area. Both dealers have a long history. I will post more if and when I have confirmations...

Thank you, Good Luck to your dealership. The next 12 months are going to be rough for everyone.

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I hope mine makes it as it does one hell of a good job all the way around.

On the other hand I can give you 6 others if they shut their doors at the end of today I would toast their loss.

IF anything this is a good chance for GM to shead many of the dealers that have done more harm than good. I have had too many GM dealers that false advertise and lie. I usally buy from the ones that treat me right and will not blow smoke up my butt. THey are out there but I hate having to go to the other only to walk out till I find a good dealer.

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I hope mine makes it as it does one hell of a good job all the way around.

On the other hand I can give you 6 others if they shut their doors at the end of today I would toast their loss.

IF anything this is a good chance for GM to shead many of the dealers that have done more harm than good. I have had too many GM dealers that false advertise and lie. I usally buy from the ones that treat me right and will not blow smoke up my butt. They are out there but I hate having to go to the other only to walk out till I find a good dealer.

I totally agree, the Chrylser and Jeep dealer who also has Ford and Kia in town lost the both of them. I do not feel sorry for them that dealer always a jerk. As for my dealer that I drive 20 miles south of town that was Chev, Olds, Pontiac, and Buick until '04 now then went to Chev, Pontiac, Buick and just now after (Pontiac) is down to Chev and Buick. I am called to get an oil change for my Chevy and they DID NOT recieve the letter, so I am thankful. This was not a volume dealer but one that had been in a town of 2,500 for over 80 years and has 25 new GM cars on the lot, but they have great repeat customers and most pay cash for their cars. They have a fair labor rate, and I trust the service department and they only have 2 salesmen!

Edited by gm4life
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I was a little surprised to see the Chevy dealer that used to be Bill Heard Chevrolet become "Classic" Chevrolet when Bill Heard went out of business earlier this year. From what I understand, Bill Heard was one of the worst dealers in the country.

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I was a little surprised to see the Chevy dealer that used to be Bill Heard Chevrolet become "Classic" Chevrolet when Bill Heard went out of business earlier this year. From what I understand, Bill Heard was one of the worst dealers in the country.

That he was.

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Not good, I doubt we will get a $h! list. I just want to know if my small town dealer got the shaft. If they did, I will be pretty pissed.

I have a feeling this may just alienate more customers in the long run, and the worst part is that it is likely going to gut the dealer network the most in the midwest, where their hometown dealers may not sell tons of cars apiece but still manage to keep overall market share pretty high compared to other regions.

As gm4life is familiar with as well, pretty much any town of decent size in Iowa had a small Chevy dealership. The town I grew up in had ~900 people yet had a Chevy "garage" into the 80's. Now the towns of <20,000 are probably losing their little hometown stores as well.

The only problem with this is if your going to have to drive an hour into town to go to buy from the Chevy dealer, might as well check out Ford/Dodge/Honda/Toyo/etc. along the way, right?

Edited by fightingbee
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I really would like to know which ones GM is closing too. Chrysler killed 5 in Wyoming, including the Jeep dealership I go to here in Laramie. The other four are Jackson, Riverton, Rock Springs, and Torrington. I wonder how many GM will close, because around here there are a ton of little family operations in the small towns. And, almost everything here is two hours or more to a decent sized place where some dealerships might survive.

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The only problem with this is if your going to have to drive an hour into town to go to buy from the Chevy dealer, might as well check out Ford/Dodge/Honda/Toyo/etc. along the way, right?

You darn right.

Mine is safe, but still this is NOT a good thing. When people have to go to the "city" it only raises the chance they will consider a non-domestic vehicle not a good idea.

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I'm sure that if people can get to the city to see a talkin' picture, they can get there to look at one of them horseless carriages.

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I'm sure that if people can get to the city to see a talkin' picture, they can get there to look at one of them horseless carriages.

:rotflmao:

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