Report: GM Dealer Reinstatements to Increase; Final Tally Expected Next Month

General Motors is reportedly set to reinstatement more of its originally canceled dealers. An Automotive News update pegs the total of GM franchises to reach 5000 dealers, an improvement over previous estimates.

Last year, GM looked to trim the total number of franchises in the United States to just about 4100 dealers as part of its highly scrutinized, prepackaged bankruptcy. Before bankruptcy, GM had around 6000 dealers in business across the U.S. and surmised fewer locations would reduce overall costs and improve the average sales numbers and profits at the surviving franchises. Not all dealers targeted for termination, however, were going to leave the corporate decision unchallenged.

Back in March, we reported that 1160 of the close to 2000 axed dealers challenged GM’s ruling, and 666 were selected for reinstatement. Out of the 666 selections, 580 ended up signing new franchise agreements at the time.

Including the dealers that have signed back onto the GM program, nearly 4700 dealers would be up and running today. The most recent update now has that figure up to 5000 by next month, with the remaining 300 or so stores still in arbitration or negotiations. The official franchise total is expected after July 14, the final date required by law for GM to finalize its dealer arbitration talks and decisions.

“We’re not providing numbers. Those numbers change every single day,” said GM spokeswoman Ryndee Carney. “We are talking to dealers who are trying to settle cases with us. We are going to arbitration hearings. Decisions are being handed down and those numbers change every day.”

Despite adding more dealers, GM affirms it remains on target with its restructuring plans and continues to stress the importance of its corporate-dealer relations.

Sources: Automotive News (Subscription required), Detroit News


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