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AutoBlog: GM to get tough with dealers during bankruptcy

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Filed under: Government/Legal, GM

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General Motors is going to right-size its dealer body as part of its bankruptcy, and the Detroit automaker is going to ask plenty of dealers that make the cut to remain with the "new" GM. The General has already announced that 1,124 dealerships wouldn't be renewed in October 2010, and another 200 franchises will receive similar notices this week.

GM VP Mark LaNeve told Automotive News that the remaining GM retail outlets would need to sign a participation agreement to stay off the endangered species list. The agreement will guarantee that the dealers will make required facility upgrades and reach customer satisfaction objectives. Surviving dealers will also need to remove all non-GM vehicles from the showroom. If the dealers refuse to sign the participation agreement by a mid-June deadline, they will be cast into the "old GM" bin, and the dealerships will be terminated in a manner similar to the 789 Chrysler dealers that will cease to exist on June 9.

The 1,324 dealers that are scheduled to go away in 17 months will also need to sign an agreement to avert an early closure. The "wind down" agreement will enable the dealerships to receive money from GM for inventory for unused inventory and leftover parts and signage. In return, the dealers will not be able to sue the General. Some dealers will even be paid up front for their loss, while others will receive money closer to October 2010. Dealers that refuse to sign the wind down agreement will lose their franchise soon after the mid-June deadline.

[source: Automotive News - Sub. Req. | Image Source: Mark Ralston/Getty]

GM to get tough with dealers during bankruptcy originally appeared on Autoblog on Wed, 03 Jun 2009 09:33:00 EST. Please see our terms for use of feeds.

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Finally, GM can get rid of its excessive dealer network and the crappy dealers.

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This should help.

Chris

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Wow, tough stance. Needed though. I especially like this part:

Surviving dealers will also need to remove all non-GM vehicles from the showroom. If the dealers refuse to sign the participation agreement by a mid-June deadline, they will be cast into the "old GM" bin, and the dealerships will be terminated in a manner similar to the 789 Chrysler dealers that will cease to exist on June 9.

I still would like to see a list of who got the termination letters. Chrysler was apparently required to publish it, why not GM? I home my small town Chevy/Caddy dealer survives, I'd really miss them.

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Surviving dealers will also need to remove all non-GM vehicles from the showroom.

DAMN IT! There goes my plan to open a string of Packard, Oldsmobile, Isuzu, Plymouth, Eagle dealerships!

That's a winning lineup with Luxury, Mid-Lux, Trucks/SUVs, Everyman, and sporty entries!

DAMN YOU GM! :cussing: :cussing:

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Part of this plan apparently involves cutting the number of Cadillac dealers from about 1400 to around 400 nationwide. GM did a study about how many dealers competitors such as Lexus, BMW, Mercedes and the like had, and feel that they can do more with less. So this may add another 1000 dealers to the total closing, I don't now if they have already been counted in the numbers published. . .

Edited by thedriver
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Now lets just hope that this gets rid of the crappy dealer, and not the good ones. I know one id really like to see go away...

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I'm hoping and thinking that this will give GM much more control over their dealer body.

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I'm liking this strategy. Much better direction, focus and presence delivered with this policy. I recall it being a tough thing for a certain dealership I know to sell Cadillacs because there was a premium for the dealership just to have the brand name on its road-sign. I wonder if that will change now?

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I like this part the best. GM is learning from its past mistakes, and the wind down mode of closure will soften the impact.

The 1,324 dealers that are scheduled to go away in 17 months will also need to sign an agreement to avert an early closure. The "wind down" agreement will enable the dealerships to receive money from GM for inventory for unused inventory and leftover parts and signage. In return, the dealers will not be able to sue the General. Some dealers will even be paid up front for their loss, while others will receive money closer to October 2010. Dealers that refuse to sign the wind down agreement will lose their franchise soon after the mid-June deadline.
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If GM holds to this plan we will get

Better dealers

Better service

Better over all dealer experiance

Dealers will get better pices on the cars they sell

Think of all the things we and other complained about on being treated poorly at the dealer in sales or service. This should make the dealer network stronger and a the customer treated better at the dealer. We should expect a more Saturn, Honda, Toyota kind of treatment.

Before GM could do little to shead poor dealers. They had little say in how dealers operated. The cream will be rewarded and the scum will fade away.

The Chrysler dealers here that died are all dealers that should have died. Most were problematic or just crooked. I expect the same for the GM dealers.

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If GM holds to this plan we will get

Better dealers

Better service

Better over all dealer experiance

Dealers will get better pices on the cars they sell

Think of all the things we and other complained about on being treated poorly at the dealer in sales or service. This should make the dealer network stronger and a the customer treated better at the dealer. We should expect a more Saturn, Honda, Toyota kind of treatment.

Before GM could do little to shead poor dealers. They had little say in how dealers operated. The cream will be rewarded and the scum will fade away.

The Chrysler dealers here that died are all dealers that should have died. Most were problematic or just crooked. I expect the same for the GM dealers.

GM needed a bariatric surgery, and a fast paced bankruptcy will only help reduce the lard GM has gathered over the years because of excess of everything - greed, mismanagement, personnel, incompetencies, egos, etc.

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GM needed a bariatric surgery, and a fast paced bankruptcy will only help reduce the lard GM has gathered over the years because of excess of everything - greed, mismanagement, personnel, incompetencies, egos, etc.

Greed, mismanagement, personnel, incompetencies, egos, etc. that is just buisness it is everywhere and always has been. As large as GM was it was a bee hive with hornets, wasps and honey bees all in one hive. With the reductions of models and personel the GM hive should start to operate as one unit as it should have years ago.

No more worring about Pontiac and Chevy badge engineering , crossing markets or stealing sales. Buick Caddy and Chevy will be in three directly different markets and should operate as team now. Yes there will be issues and politics in GM just as any other company. But in GM's case less company will mean more control from those responsible. It will mean more responsiblity and accoutabiliy as it will come down to a couple people vs a large face less goup who could push off their fault on others. No more hiding of blaime.

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Higher markups on hot new models?

or

Lower markups because dealers are more fearful of being cut off?

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No more worring about Pontiac and Chevy badge engineering , crossing markets or stealing sales. Buick Caddy and Chevy will be in three directly different markets and should operate as team now. Yes there will be issues and politics in GM just as any other company. But in GM's case less company will mean more control from those responsible. It will mean more responsibility and accountability as it will come down to a couple people vs a large face less goup who could push off their fault on others. No more hiding of blaime.

Those were the precise points GM was lacking. Be it responsibility towards customers or accountability for its interest holders. I certainly hope GM realizes and revives thoroughly after this bankruptcy, as it will NOT get a second change.

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I wonder if they will cut those that have separate show rooms but on the big lot is GM Chevrolet and Mazda? The dealership here in Kirkland rebuilt 2 years ago and has a very nice lovely dealership, 3 big seperate show rooms, Mazda, Kia & Chevrolet. So you pretty much can walk their huge lot or just go between the 3 show rooms via the covered walk ways. That is the way to go.

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