GM Won't Name Doomed Dealers

GM just released its official statement regarding the approximately 1,100 dealers it will not renew contracts with by the end of 2010. Besides confirming that number, the company also said it would not release a list of the stores included in the group.

It did say that number was on top of the 470 Saturn, Hummer and Saab dealers already dealing with the possible sale of their brands. GM executive Mark LaNeve said that around 400 to 500 of the dealers are very small, selling only 35 units a year. The remainder have had poor performance for many years, according to LaNeve, and were likely to go out of business before this decision was made, according to internal accounting. La Neve said this advance notification allows dealers to gradually sell down their inventory and parts, acquire a different franchise and lay off employees over time instead of all at once.The 1,100 dealers made up just 7% of sales in 2008.

Because GM is not disclosing which dealers are on its list, the company is leaving it to the franchise owners themselves to let customers know their long-term plans. However, this could cast doubts on every GM dealership when car shoppers are considering when and where they decide to buy. We would suggest any car shoppers ask a dealer representative if they are not getting their franchise renewed.