GM to reinstate more than 580 rejected dealerships, sources say
Chrissie Thompson
Automotive News -- March 5, 2010 - 10:28 am ET
DETROIT -- General Motors Co. is preparing to reinstate a majority of rejected dealerships that applied for arbitration, four sources familiar with the matter said.
That means GM will restore more than 580 of the 1,160 dealerships that have filed for arbitration to get their franchises back.
GM plans to send letters to dealers as soon as next week that say the automaker intends to restore their franchises outside of arbitration, the sources said. GM has mostly finished the process of selecting dealerships to reinstate outside of arbitration, one of the sources said.
The remaining dealerships, which GM intends to wind down before November, will not receive letters. GM will attempt to settle or arbitrate with them, the sources said.
GM North America President Mark Reuss and U.S. marketing chief Susan Docherty "will give an update on the dealer arbitration process" in a conference call today at 3 p.m. EST, the automaker said in a statement.
The executives will hold a webcast with dealers at 2 p.m., two dealers said.
GM declined to comment on the reinstatement process.
Meanwhile, on Monday, GM started sending dealers a separate letter that offered the start of settlement talks that could result in reinstatement. Those letters required dealers to agree to a variety of conditions, including keeping some documents confidential.
The plans show the next step in GM's attempt to make peace with dealers, many of whom were alienated when GM decided to cut 1,350 stores last year in advance of its U.S. bankruptcy. About 1,160 of them have filed for arbitration to contest that decision, according to the process outlined in the federal law that gives the dealers that right.
The restored stores will regain all of their dealership privileges immediately, including the ability to order new product, one of the sources said.
Mark Reuss, president of GM North America, had said GM planned to contact dealers to discuss settling outside of arbitration.
Reuss has said that good dealer relations are among his top priorities this year. He gained direct responsibility for U.S. sales in a management shakeup announced Tuesday.
