When General Motors filed for bankruptcy about a year ago, it announced that it would cut 2,000 dealers as part of its turnaround program. GM sent shutdown notices to dealers earmarked for closure, but pushback from the dealer community caused our favorite automaker to reconsider. What ended up happening was that all dealers that received such a notice were given a second chance to make a case for themselves in arbitration.
1,160 dealers took GM up on the offer. Out of those 1,160, 661 were reinstated and the rest were given the ability to discuss compensation or reinstatement with GM in private. Fast forward to today: Mark Reuss, President of GM North America, said that GM will have nearly 5,000 dealers in the U.S. by the end of July. A GM spokesperson however, said that a final tally of GM dealers will not be announced until the arbitration process comes to a close.
This is 900 dealers more than GM originally planned for as part of its restructuring – something that may come back to haunt The General in the long run. Afterall, Toyota makes do with nearly 1,000 dealers less than GM’s post-bankruptcy dealer count but sells nearly as many vehicles.[Source: Detroit Free Press]