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Sunday, 17 May 2009 16:49

Auto Task Force Will 'Stand Behind' GM

GM announced that it has started notifying about 1,100 underperforming and very small sales volume US dealers that it would not retain them on a long-term basis. Unlike Chrysler,s more definitive announcement, GM will allow appeals and will repurchase inventory from at least some of the dealers.

The Treasury Department said on May 15 that the federal Auto Task Force will "stand behind" GM during this process to "ensure that it emerges as a more competitive, viable business in the long-term."

"As difficult as these announcements are for the dealers that will no longer be selling GM and Chrysler cars and the communities in which they operate, without the president's intervention, the entire GM and Chrysler dealer networks could have been lost," Treasury said.

Treasury said that because the administration is supporting "a restructuring that results in stronger car companies - supported by efficient and effective dealer networks - this process will not only provide more stability and certainty for current employees but the prospect for future employment growth."


The move is a part of GM's updated viability plan submitted last month under which the automaker plans to reduce its current dealer network of 5,969 stores to about 3,600 by the end of 2010.

GM also said it will be updating about 470 Saturn, Hummer and Saab dealers on the status of those brands. GM is planning to jettison those brands over the next few months.

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