General Motors is going to right-size its dealer body as part of its bankruptcy, and the Detroit automaker is going to ask plenty of dealers that make the cut to remain with the "new" GM. The General has already announced that 1,124 dealerships wouldn't be renewed in October 2010, and another 200 franchises will receive similar notices this week.

GM VP Mark LaNeve told Automotive News that the remaining GM retail outlets would need to sign a participation agreement to stay off the endangered species list. The agreement will guarantee that the dealers will make required facility upgrades and reach customer satisfaction objectives. Surviving dealers will also need to remove all non-GM vehicles from the showroom. If the dealers refuse to sign the participation agreement by a mid-June deadline, they will be cast into the "old GM" bin, and the dealerships will be terminated in a manner similar to the 789 Chrysler dealers that will cease to exist on June 9.

The 1,324 dealers that are scheduled to go away in 17 months will also need to sign an agreement to avert an early closure. The "wind down" agreement will enable the dealerships to receive money from GM for inventory for unused inventory and leftover parts and signage. In return, the dealers will not be able to sue the General. Some dealers will even be paid up front for their loss, while others will receive money closer to October 2010. Dealers that refuse to sign the wind down agreement will lose their franchise soon after the mid-June deadline.

[Source: Automotive News - Sub. Req. | Image Source: Mark Ralston/Getty]

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