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GM won't postpone dealer closings

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GM won't postpone dealer closings

David Shepardson / Detroit News Washington Bureau

General Motors Co. said today it won't halt the closing of hundreds of dealers by the end of the month, despite a request by two Ohio congressional Republicans.

U.S. Reps. Steven LaTourette and House Minority John A. Boehner want the Obama administration "to immediately suspend GM closures until a current investigation of dealer terminations is completed."

GM had proposed cutting about more than 2,000 dealers during bankruptcy; it agreed to restore about 700 during congressionally mandated arbitration hearings.

GM spokesman Greg Martin said the company isn't going to drop the plans.

"GM has no plans to extend the wind-down agreements' deadlines with dealers. GM and its dealers have made significant progress over the last several months with a clear focus on selling great cars and trucks and providing a superior retail experience," Martin said. "An extension would only divert our collective attention at a critical time and would ignore the independent decisions of arbitrators and individual settlement agreements between GM and its dealers."

LaTourette and Boehner on Friday sent letters to President Barack Obama, Treasury Secretary Timothy Geithner and Neil Barofsky, special inspector general of the Troubled Asset Relief Program, urging a halt to the planned closings.

"There is too much at stake to proceed in an atmosphere where dealers were denied so much crucial information in a process rife with secrecy," the lawmakers said. "We believe it is necessary to thoroughly analyze its results before continuing with the closures of hundreds of dealerships, and the potential loss of thousands of jobs."

Boehner may become House speaker if poll projections hold and Republicans regain control of the U.S. House of Representatives after the Nov. 2 elections.

GM had about 5,000 active dealers as of Sept. 30; GM spokeswoman Ryndee Carney said the company will have about 4,500 by Nov 1.

In June 2009, GM had 6,049 dealerships and by the end of the month its network will be about 25 percent smaller.

Most of the dealers who are closing received wind-down payments from GM.

Dealers who did not get new agreements cannot sell new vehicles or perform warranty service after Oct 31, Carney said.

From The Detroit News: http://detnews.com/article/20101025/AUTO01/10250386/1148/auto01/GM-won’t-postpone-dealer-closings#ixzz13PE6XkOT

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