General Motors will have 4,500 dealers after, under pressure from Congress angry with job losses, reversing planned closures of over 800 franchises.
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GM finalised dealership closures and franchise reinstatements over the weekend, one of the final pieces of business to be checked off before beginning its presentation to investors this week on its proposed share sale, Reuters reported.
The automaker said it intended to stick with the decision to terminate 1,233 dealerships as of Sunday following months of arbitration and despite continued pressure from lawmakers, including an Ohio delegation that includes House Republican Leader John Boehner, to keep more small businesses open in a struggling economy.
“GM has no plans to extend the deadlines in the wind down agreements with dealers as that process is now complete,” the automaker said in a statement.
“An extension would only divert our collective attention at a critical time and would ignore the independent decision of arbitrators and individual settlement agreements between GM and its dealers,” GM said.
GM had roughly 6,200 dealerships selling eight brands prior to its 2009 bankruptcy, a number considered by industry experts to be a symptom of bloat and inefficiency. As part of its government-led restructuring, GM proposed 1,245 full closures and 794 partial wind downs.
Jesse Toprak, vice president of industry and trends at TrueCar.com, told the news agency GM’s 4,500 ceiling was a start but that the company still needed to reduce the network to ensure competitiveness and strong pricing.
“Ultimately, I think they would be better served with a lower number,” Toprak said, noting that a figure below 4,000 would be better for the viability of GM’s remaining brands.
GM’s remaining network of 4,500 dealers are selling four brands: Chevrolet, Buick, GMC and Cadillac.
