General Motors Corp. said it has reversed decisions to end franchise agreements with 60 dealers, as the largest U.S. automaker scales back its retail network under bankruptcy reorganization.
Some franchise owners were able to show that GM used inaccurate financial information in placing them on the list for closing, Susan Garontakos, a company spokeswoman, said today.
The revisions mean fewer shutdowns after Detroit-based GM began notifying about 1,330 dealers on May 15 that it didn't intend to renew their franchises when they expire next year. The automaker is trimming retail outlets as it shrinks to four brands from eight under its bankruptcy plan. GM filed for court protection June 1.
"This seems in line with what they expected," Stephanie Brinley, an analyst at AutoPacific in Troy, Michigan, said of GM's changes in the list. "They expected the number reversed to be small. It was important that they took the time to review those decisions."
GM said on May 15 that it would notify 1,100 dealers that their franchises wouldn't be renewed. The number since had risen to 1,330, Garontakos said.
For dealers slated to close, GM offered financial aid to help wind down their franchises, if they agreed to the company's terms. Accords have been reached with 98 percent of the about 1,270 dealers that remain on the list, the automaker said.
GM plans to cut retail outlets to between 3,600 and 3,800 by the end of next year, from about 6,000 now. In addition to canceling franchises, GM expects to lose about 450 Saturn, Saab and Hummer dealers as it shed those brands. The rest of the reduction is to occur through attrition and consolidation.
