General Motors Rekindles Flame With 41 Dealerships

June 11, 2009

General Motors has decided that maybe it's not such a great idea to ditch 41 dealers from its nationwide network. This comes as members of congress have second thoughts of their own about the GM bailout, thanks in part to the fallout from the preceding Chrysler bailout.

When Chrysler cut 789 franchises from its dealer network several weeks ago, congress seems to have been caught slightly off guard, and now, elected officials aren't sure they can make the newly restructured/merged company take them back. Those same officials are being more proactive with GM: not only has Senator Bob Corker (R-TN) introduced a bill to force reimbursement to 86ed dealers for unsold inventory, but legislation has also been submitted in the House to keep dealers on the Chrysler and GM roll books. In fact, a quick search for Automobile Dealer Economic Rights Restoration Act of 2009 reveals not one, but two bills that aim to reinstate eliminated dealers from their networks.

If passed, how these bills would play out in court is up for grabs, but General Motors isn't taking any chances and has reinstated the aforementioned dealers. What that means for the 2,000-plus outlets still perched on the chopping block or the 500 who have submitted appeals to the General is unsure. We know that prior to filing for bankruptcy, GM had around 6,000 dealerships, and the company has offered 4,100 of them the chance to continue under the GM banner. We also know that by the end of 2010, the company hopes to have a maximum of 3,800 outlets in the U.S., so unless we forgot to carry a one, something's gotta give. Grim math, indeed.

[DetNews, AutoNews]

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