Back in May, General Motors announced plans to close down a large portion of its dealership network. Since then, a number of those franchisees have lodged complaints to both the automaker itself and appropriate policymakers, leading to possible legislation on how GM is allowed to handle the closing of dealerships. This being the case, The General is proactively drafting a new set of rules as to how it will deal with these to-be-shuttered dealerships, and it promises that some are likely to be reinstated after the process.
Specific details can be seen in the press release pasted after the break, but it seems that the new plan basically will allow these affected dealerships to get some real-life face time with the automaker to hear exactly whey they were targeted for closure. If the dealer still isn't happy with the outcome, it can elect to enter binding arbitration. If that arbiter finds that GM chose to shutter the dealership for anything other than sound business reasons, the franchise stands to be reinstated.
There's plenty more detailed in the plan, including a provision for GM to help service technicians and dealership employees find new placement, after the break. This plan will go into effect by mid-January "provided that legislation related to GM's dealer restructuring does not move forward."
[Source: General Motors | Image: Justin Sullivan/Getty Images]
GM Announces Comprehensive Plan to Address Dealer Concerns
Today, GM is announcing that it is prepared to implement a comprehensive plan that both resolves concerns raised by dealers regarding GM's dealer network restructuring activities and allows it to continue to move forward with a critical component of its long-term viability plan.
GM will begin to implement this plan in mid-January provided that legislation related to GM's dealer restructuring does not move forward. GM's plan offers a more certain and timely process and the appropriate alternative to address dealer concerns especially compared to proposed legislation that would raise a variety of legal and constitutional concerns. The GM plan, the result of several months of discussion and constructive engagement among dealer groups and Members of Congress, provides complete transparency, face-to-face reviews and binding arbitration, which together, will likely result in some dealers being reinstated.
"GM especially appreciates the leadership of Senator Durbin and House Majority Leader Hoyer and the contribution of other Congressional members. Their tireless efforts to facilitate the discussion among all parties to achieve a non-legislative resolution to address dealer concerns were critical to the development of GM's comprehensive plan," said Susan Docherty, GM Vice President, U.S. Sales.
"GM values its dealer body and recognizes the contributions they are making to the future viability of the company, the critical role they play in satisfying customers and their importance to communities across the country. We are prepared to implement this plan so GM and its dealers can channel our full focus on building and selling exceptional cars and trucks with the consumer experience to match," Docherty said.
"I would also like to thank the National Association of Minority Automobile Dealers (NAMAD) for their commitment to work through some very difficult and complicated issues involving GM's dealer network," Docherty said.
GM's plan includes:
* A commitment to advise all Chevrolet, Buick, GMC and Cadillac dealerships that received a complete wind-down agreement of the criteria used by GM in the selection of that dealership for wind-down.
* A face-to-face review process for all complete wind-down dealers who have not already terminated their dealer sales and service agreements with GM.
* If the complete wind-down dealer is not satisfied with the outcome of the face-to-face review process, he or she may elect to proceed to binding arbitration. The arbitration will expressly be limited to whether GM selected the dealer to receive the wind-down agreement on the basis of its business criteria.
Additional components include:
* Accelerated wind-down payments to dealers consistent with the terms of their wind-down agreements.
* A process to resolve open issues identified by dealers related to the operation of wind-down dealers.
* Agreement to support public policy issues of mutual interest identified by dealers.
* Agreement to work with appropriate policy makers regarding floor-plan and other financing issues that are important to dealers.
* Additional evaluation in limited circumstances for complete wind-down dealers who purchased stock, land or dealerships from GM in the last four years.
* Reaffirmation of GM's long-standing commitment to try to increase the diversity of its dealer body.
* In the limited circumstances where there are dealer re-establishments, area wind-down dealers will be given the opportunity to submit a proposal.
* Market reevaluation to ensure GM has sufficient dealer representation across the country.
* Placement assistance for service technicians and other dealership employees.