• Jun 11, 2009
General Motors wants to shrink its dealer network by around 2,500 outlets and has sent closure notices to more than a thousand already. Still, the General has left a door open that allows affected dealers to appeal the decision and show proof of why they should not be cut from the herd.

According to reports, almost the entire affected body of dealers appealed, and 500 of those appeals are still pending. Thirty dealers have had their sentences overturned and will be allowed to stay open. It is good news for the dealers... and yet the math remains the math: strorefronts have got to go.

[Source: Automotive News, sub. req'd | Photo by MARK RALSTON/AFP/Getty]


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    • 1 Second Ago
  • 8 Comments
      • 5 Years Ago
      Sample appeal:

      Dear GM:

      We have been a good an loyal dealership and have sold your cars for the last 50 years. We would like you to reconsider your decision to revoke our franchise for the following reasons:

      # We exclusively sell HUMMER, Pontiac, Saab, and Saturn cars
      # We are in Barney Franks congessional district and we will tell on you

      We thank you for you consideration and expect that you will see it fit to renew our franchise agreement and continue to supply us with HUMMER, Pontiac, Saab, and Saturn vehicles.

      Thank you,

      Congressional Mafia Motors

      The real question is why did they authorize the first franchise agreement with a dealership called Congressional Mafia Motors in the first place especially since it was right across the street from Spitzer Chevrolet and adjacent to SIMS Pontiac, Buick, GMC (and formerly Oldsmobile)
        • 5 Years Ago
        But it was OK when a half dozen republican senators with a handful of plants from competing import manufacturers to lead the charge to set the Big 3 on a course for liquidation.
        • 5 Years Ago
        are we still democracy ? or never
      • 5 Years Ago
      Is there a list of gm dealers closing yet?
      • 5 Years Ago
      if the dealer owns the store and has to carry the burden of the stock he carries, how does closing stores save GM any money?
        • 5 Years Ago
        Go shop a Camry or Accord, and you can easily find one at invoice or real close. It doesn't seem to hurt their resale value. My guess is that huge incentives go a lot further to hurt resale value. That, too much production and tons of fleet vehicles adds to the problems.

        It's simple, build an amount of cars that matches the number of customers wanting one, and the prices and resales stay up. Double the amount of cars, and you have to give them away to increase demand. Even with all those dealers prices stayed up for PT Cruisers, 300s, CTS, Escalades, etc when they first came out. The factory can control that directly by the amount of cars they produce.

        Not that there aren't too many stores out there, but let the market weed out the weak ones, then don't fill the point if the area is oversaturated. That being said, I think many (not all) of these were because they don't want competition in the same building.
        • 5 Years Ago
        My understanding is that the plethora of dealers leads to too much internal competition and forces the dealers to sell vehicles at rock-bottom prices. This has the negative effect of lowering the re-sale value of the car.

        There are tons of other reasons, but this is one of the important ones.