General Motors to slash 1100 dealerships

General Motors issued a statement saying that, as part of their updated viability plan, they plan to reduce its dealer network from 5,969 stores today to approximately 3,600 by the end of 2010.

This process starts today, as GM begins contacting dealers regarding its long term planning. Approximately 1,100 underperforming and very small sales volume U.S. dealers will be advised that GM does not see them as part of its dealer network on a long-term basis. In most cases, existing franchise agreements run through October of 2010.

In addition, GM will be updating about 470 Saturn, HUMMER and Saab dealers on the status of those brands and discuss how the remaining dealers will support future retail plans. While additional cuts will be made, they believe over 90% of the remaining dealers will be offered a chance to remain with GM. However, specific dealer issues, further attrition and additional possible dealer network actions are expected to bring the number of future GM dealers to around 3,600 by the end of 2010. The actual number could vary.

GM’s viability plan calls for fewer, stronger brands as well as fewer, stronger dealers. They will identify those stronger dealerships and keep them in the GM dealer network.

As independently owned businesses, dealer owners will make their own decisions if and when they want to make this information public. GM is not releasing the names of any dealers.

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