GM to Close 1100 Dealers

Large-scale dealership closing will result in the loss of 137,330 jobs

By Alex Ricciuti
May 18, 2009 1:19 PM
Filed Under: American, Corporate/Financial, General Motors, Industry

First it was Chrysler, which last week declared it would close 789 dealerships. Now, it's GM, upping the 'screw the little guy for the big guys' mistakes' ante to 1,100 dealership closings.

GM is downsizing as quickly as possible, hoping to save what it can of itself, and when its plan for dealer closings was rejected by the Obama administration back in February for not going far enough, GM knew it had to come up with something more drastic. And not just to impress its benefactor the US government, but because the writing had been on the wall for a long time and new CEO Fritz Henderson has finally come around to recognizing it.

GM will be cutting its dealership ranks by and additional 1,100 to 3,600 by next year. Down from the 5,969 dealers it had at the end of 2008, a total reduction of 40 percent. It has notified those dealers that are to close by letter and will have to buy back about 65,000 cars from them in order for them to step aside more readily.

About 400 to 500 dealerships will go by way of eliminating the Saab, Hummer and Saturn brands. GM expects the remaining dealers, the weakest performing ones, to close down voluntarily. 137,330 people will be losing their jobs.

GM is doing all this painful slashing in the hope of averting what now seems inevitable, following Chrysler into bankruptcy.

Cue the falling curtain.

Source: detnews.com

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Tags: GM bailout, GM bankruptcy, Chrysler bankruptcy, dealership closings

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Comments

Bristol411S3

May 18, 2009 1:34 PM

Er, that's 2300+ dealers getting axed, not 1100, right? And will all those people lose their jobs, or will the dealers just downsize slightly and focus on used car sales instead (there are unlikely to be new franchises to be taken on)?

9TNine

May 18, 2009 1:50 PM

Makes you wonder how BIG the car industry is (was?) in the USA...!

Joe_Limon

May 18, 2009 3:53 PM

I heard 6400ish gm dealerships

eltorch

May 18, 2009 2:01 PM

Huge american car manufactures ruin everything

GTB

May 18, 2009 3:23 PM

But there is Ford stil to save the US car industry. Did u ever cnsider why so many americans by non US made cars. Espescialy ones made in europe, such as VW brand.

mnovakowski

May 18, 2009 4:05 PM

Unfortunately Ford is a UAW shop. Since UAW owns Chrysler and soon will own GM what do you think will happen at the next contract negotiations? My guess is Ford will either dump the union or go belly up.

500lbman

May 18, 2009 5:03 PM

It is too bad that the American dealership employee has to take it in the shorts because of the idiots at the top of GM and Chysler and the UAW that holds the factories hostage.

Congrats UAW, you have successfully put over 137,000 people out of a job with your greed and lack of vision.

To buy a car from a company that employs UAW employees is to support a union that lies, uses coersion, and steals from their members.

Stop the UAW. Do not buy from manufacturers that are held hostage by the UAW.

hata0101

May 19, 2009 5:12 AM

totally agreed! DON'T buy anything made by UAW! start the petition! they're one of the reason why GM/ Chyrsler failed. actually, the automake SHOULD form an ANTI-UAW UNION! whoever the member of UAW, blacklist them & never hire them in the whole auto industry!

oryxx

May 19, 2009 7:39 PM

UAW is anti-american, its a socialist philosophy, its the new USSA (United Socialist States of America)

Lutzie

May 24, 2009 7:52 AM

Blaming the UAW for the collapse of the American car industry is pretty stupid. They simply negotiated hard deals for their members and the company representatives did the same from the other side. Were GM's and Ford's and Chrysler's negiators so hopeless? Why not blame the unregulated finance industry that caused the economic meltdown. Or is that 'unAmerican' too?

freeway

May 18, 2009 5:33 PM

'screw the little guy for the big guys' mistakes'... that's a good one... I've just read today on yahoo site an article with the biggest automotive flops... so much money spent on developing cars like Chevy SSR, GMC Envoy XUV, Dodge Durango, Chrysler Crossfire, Plymouth Prowler, etc., cars that were a total commercial failure even if some of them were quite nicely designed... and what once was a mighty giant (GM), now is becoming a small bug! Thank you Mr. Wagoner & Co... so "no comment needed anymore"

harshreality

May 18, 2009 9:51 PM

Thats a good point, when the biggest selling point for GM is Onstar(thats all they seem to advertise now in their commercials) then thats a good indicator of why they are going belly up.

TheAlchemist

May 18, 2009 6:31 PM

Cutting 40% or even 60% of the factories isn't going to do squat. Just delaying the inevitable. I got an idea, build good-looking quality cars, and people will come buying. Until then, the ball is still rolling downhill...and picking up speed. ...I can't wait till they die.

rcw

May 18, 2009 6:34 PM

The information in this story is good, but this is the second time that WCF has slathered the word "Bankrupt" across the GM image, and, GM has NOT declared bankruptcy yet. This tactic is very deceptive and reduces the credibility of stories because it is misleading. Wait until the company has actually declared bankruptcy before making such a depiction.

Edited by user on May 18, 2009 at 6:36 PM

BrianWCF

May 18, 2009 8:58 PM

Actually, its the 4th or 5th time.

Siawa

May 18, 2009 6:36 PM

"137,330 people will be losing their jobs."

Like GM or not, that's just a painful number.

GTB

May 18, 2009 6:39 PM

If U look at this from our point of view, its easy to tell that It Was Bound To Happen Sooner Or Later. Reason beeing poor design & performance of cars. If u go back 25 years ago, US stil head some good cars, but then car makers like BMW, Mercedes, started to take over bit by bit. Then as time went, japanise cars also came on the market, and made big impact. Subaru & Honda, Mazda also done some damage. Respons of GM, Ford(US) 6 others was 0 - non. Cars had poor design, non of them coul go around curves, and had a realy big engine, with almoust non HP.

If u Have fore example an Audi TDI 5.0 liter w12 its more elegant, more powerfull, looks beter, than Hummer ore any Jeep, ore GMC truck, so if u add all this mistakes that have been done over the years, the end result is todays GM.

Ford can only thank Euro Ford fore having such sucses in the europe, so te damage is minimum, compared with other two.

Joe_Limon

May 18, 2009 9:31 PM

As far as reliability and quality is concerned, mazda is ford. My mercury cougar had the exact same engine as a Mazda 6. And as the American trucks being a flop, I would also disagree, they vastly outsell the more elegant w12 engines. Why? because they are cheap, and there are many times more middle class/lower class people in the world then there is upper class.

harshreality

May 18, 2009 10:11 PM

Joe Limon.. do you live in the US? Im just curious.

Joe_Limon

May 19, 2009 8:45 AM

I am your socialist neighbour to the north.

harshreality

May 19, 2009 8:22 PM

Well if you actually lived in the US then you would know that the popularity of big trucks like the Ford F150, Dodge Ram etc was not due to "quality" but a "marlboro man" image and because gas was dirt cheap plus there was no real full size competition from any imports. 95% of people who bought these trucks didnt haul anything, tow anything, or go offroad. Men(mostly) bought them to seem more masculine.. As for cheap price? I used to think that as well, but a well spec'ed full size American truck often went well over 40k. To me thats not cheap, thats approaching BMW, Lexus territory.

jhoffcb7

May 18, 2009 6:50 PM

i hope no one needs to goto the unemployment office, theres gonna be a line

TheAlchemist

May 18, 2009 6:59 PM

WildMaverick1200

May 18, 2009 9:57 PM

So, 100,000+ people will be dropping their pants for food, just because GM couldn't design a decent car.

dougpassat

May 19, 2009 3:56 AM

I hope all the anti-americans in this blog are happy, rejoice for this country is falling apart. See how long Europe stands

hata0101

May 19, 2009 5:07 AM

the government spent money to save trouble insurance companies, falling financial institutes...but just NOT failure auto industries. WHY? 'coz even a 5th grader knows if GM/ Chrysler fall, it won't be the end of the world. actually, it'll be a great fresh start. instead of waste money try to save the rotten roots & feed those greedy UAW people, why not let it die & get a new fresh start! or just let the "competitor" take over, build more cars in the U.S. & create jobs again. someone is going to pick up the tap anyway, so the government don't even bother to waste more money on GM/ Chrysler. believe me, GM/ Chrysler fall, the country won't. & Europe/ Japan/ South Korea will still standing, only stronger.

GTB

May 19, 2009 9:33 AM

What u think tha every thing runs becous of US. Perhapes some 30 years U where right, but now days, be shore that the rest of the world including europe can manage just fine. NHF

hata0101

May 19, 2009 11:21 PM

totally agreed with u, GTB! not only Europe & Japan, even South Korea & China will surpass the U.S. Automakers like GM & Chrysler (except Ford).

GTB

May 19, 2009 9:27 AM

I think U should suport Ford. 1. At the time when Ford was making cars, every one else still ride horses 2. Ford is the only company that didnt spent a penny of your tax money. 3. By 2011 Ford will be going strong again. 4. And perhapse the most important fact, they ara making some realy nice cars. The new Ford FOCUS RS (EU), new Fiesta, Mondeo, S MAX & Galaxy. Combined vith US made Ford trucks & the hybrid Fusion its a shore thing.

Edited by user on May 19, 2009 at 9:28 AM

smohed

May 19, 2009 9:56 AM

It is natural thing, everything goes big must get back small again

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