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GM arbitration scoreboard: 39 won, 23 lost, 4,500 stores still standing

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GM arbitration scoreboard: 39 won, 23 lost, 4,500 stores still standing

Neil Roland

Automotive News -- August 5, 2010 - 4:03 pm ET

WASHINGTON -- General Motors Co. prevailed in 39 of its arbitration cases and lost 23 to rejected dealerships as it scales down to about 4,500 stores by November, GM spokeswoman Ryndee Carney said today.

GM announced final results of a process that began with enactment of a federal arbitration law in December and ended with final decisions handed down last month on claims by dealers tagged for elimination during the company’s restructuring.

Most of the 1,176 arbitration claims filed in January never reached a decision, the company said in a statement. GM offered letters of intent that spelled out conditions for reinstatement to 702 dealerships or 60 percent of those that filed claims.

With 23 dealerships prevailing in arbitration, GM offered letters of intent to a total of 725 stores, Carney said in an interview. That’s 62 percent of the dealerships filing claims.

Most if not all recipients of letters of intent have signed them, Carney said. These stores can start selling cars as soon as they meet the conditions in the letters.

“A strong, profitable dealer network selling and servicing the world’s best cars and trucks is a genuine market advantage,” GM North America President Mark Reuss said in the statement.

Individual resolutions

GM also said today that it had reached 408 individual resolutions with dealers that filed arbitration claims.

These resolutions consist of settlements, an undisclosed number of dealership continuations that will receive letters of intent, and claim withdrawals and dismissals, Carney said.

Most of the 408 resolutions involve dealer terminations, GM said.

Still, dealer lawyers have said GM paid cash settlements in dozens of these cases -- sometimes as much as several million dollars.

New dealer network

During the summer of 2009, GM notified 2,064 dealerships of plans to terminate at least one of their franchises by October 2010. GM’s goal was to pare its dealer network from 6,049 stores to about 3,600.

That network is now likely to be about 25 percent larger than originally planned, with about 900 more stores -- making a total of about 4,500.

While GM declined to give a dealership breakdown, Carney did provide a breakdown by franchise for the new network.

In November, there will be about 3,100 Chevrolet franchises, 2,100 Buick franchises, 1,750 GMC franchises and 925 Cadillac franchises, she said.

About 1,000 of the continuing stores are scheduled for “a major facilities upgrade” by the end of this year, the statement said. Included in the upgrades will be work areas with phone and laptop computer outlets, Wi-Fi and a cafe area with refreshments.

Read more: http://www.autonews.com/article/20100805/RETAIL07/100809885/1422#ixzz0vlc3jYgx

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By Andrew Ganz

General Motors said today that it has finished its dealer arbitration process and that it will have approximately 4,500 U.S. dealerships by November 1. That’s a far cry from the 3,600 showrooms the automaker hoped to have itself down to by the end of 2010, but it does represent a trim of roughly 2,500 stores.

In June of 2009, GM had 6,049 showrooms selling its products.

While many of the dealers were lost when GM dropped its Hummer, Pontiac and Saturn nameplates – and sold its Saab brand to Spyker – GM did manage to successfully drop franchise agreements for a number of showrooms. However, many dealers fought back and won the right to stay open during an intense arbitration process.

The automaker says its process of upgrading showrooms for a better appearance and improved customer functionality is moving along at the rate of about 100 stores per month.



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GM to have 4,500 dealers left by Nov. 1



Arbitrations over General Motors dealer franchises have ended, and the automaker said it expects to have 4,500 dealerships by Nov. 1.

GM's dealer network has shrunk from 6,049 in June 2009 when GM began its 40-day bankruptcy restructuring.

As part of that restructuring, the automaker offered to "wind down" hundreds of Saturn, Pontiac, Saab and Hummer dealers because those brands were terminated or sold.

In addition, GM offered "wind-down" agreements to 2,064 Chevrolet, Buick, GMC and Cadillac dealers. Later, GM offered to take back 702 dealers out of 1,176 who filed for arbitration to stop GM's attempt to close them.

Of 62 cases that went to arbitration, GM prevailed in 39, while 23 dealers won rulings to be reinstated.

Read more: GM to have 4,500 dealers left by Nov. 1 | freep.com | Detroit Free Press http://www.freep.com/article/20100806/BUSINESS01/8060324/1210/business01/GM-to-have-4500-dealers-left-by-Nov.-1#ixzz0vpU9VHav

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GM to end 2010 with 4,500 dealers, more than planned

Arbitration finishes with about 400 more outlets than planned

David Shepardson / The Detroit News

Traverse City -- General Motors Co. will end the year with a dealer network of 4,500 -- about 400 more than the company envisioned in bankruptcy, the automaker said Thursday.

GM said it has concluded the dealer arbitration process and has shed 1,564 dealers during the past year.

The Detroit automaker initially wanted to cut 2,064 Chevrolet, Buick, GMC and Cadillac dealers from its network as part of its restructuring.

Its efforts -- along with those by Chrysler Group LLC, which also pared its dealer network -- sparked angry hearings in Congress. Lawmakers overwhelmingly approved legislation allowing dealers who wanted to remain open to challenge their ordered closings.

GM CEO and President Ed Whitacre, in an interview Thursday with The Detroit News, acknowledged that GM may have tried to cut too many dealers.

"We might have, but we added most of them back." Whitacre said. "Kind of a moot point."

Although GM's new dealer network is about 25 percent smaller than in early 2009, it remains the nation's largest, the company said.

Rebecca Lindland, an auto analyst with IHS Automotive, said GM could support the extra dealers.

"They can utilize these 400 extra dealers because their market share has been pretty steady, despite that they are getting rid of four brands," Lindland said.

Many GM dealerships, the company said, are participating in a "major facilities upgrade program." More than 300 updates already have been completed and about 1,000 projects are scheduled through the end of 2010, it said.

Major elements of the image upgrades include "customer-friendly features such as work areas with phone and laptop computer power outlets, Wi-Fi and a cafe area with refreshments," GM said.

"Our dealers are the face of GM to our customers and valued members of the communities where they do business across America," said Mark Reuss, president, GM North America.

"We're confident our dealer network will be the best in the business. It will be the right size with the right dealers to give our customers great service during and after the purchase."

GM said dealers filed 1,176 arbitration cases with the American Arbitration Association to have their franchises reinstated. Only 62 arbitration cases were completed with decisions announced.

The automaker said it has reached 408 individual resolutions with other dealers, most of which call for the dealer to continue the wind-down process. Four cases were dismissed.

Auburn Hills-based Chrysler took a much tougher line with its dealers, shutting a quarter of its network -- or 789 outlets -- in bankruptcy and giving them just 22 days notice.

Chrysler offered 50 dealers the right to reopen, and 29 accepted. Chrysler won 76 out of 108 cases that went to arbitration.

From The Detroit News: http://detnews.com/article/20100806/AUTO01/8060347/1148/auto01/GM-to-end-2010-with-4-500-dealers--more-than-planned#ixzz0vpcqKVS0

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