GM dealer downsizing could lead to barrage of lawsuits
Unsold cars will be bought back, but GM hasn't made any intimation that it's interested in compensating for special tools, parts inventory, real estate, and the "blue-sky" value of the outlet. The move to buy back only the unsold cars is likely to lead to legal action on the part of some dealers. The dealers are not only nervous, but they've often leveraged one dealership against their others in order to capitalize their operations. Closing one store that's part of a family of dealerships could start a domino effect for that franchisee, and state franchise laws protect the dealers far more than the automaker. Without filing for Chapter 11, General Motors faces a real fight in its action to pull franchises.
[Source: Automotive News - Sub. Req.]
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