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.
