GM pushes faster plan to cut U.S. dealers: sources
General Motors Corp has told U.S. dealers it is accelerating its timetable for closing about 1,700 dealerships as it rushes to meet a June 1 deadline to restructure under U.S. government oversight, people with knowledge of the discussions said.
In a series of meetings with key dealers including representatives of the National Automobile Dealers Association, GM executives also said about 200 dealerships had closed in the first quarter, according to people briefed on those talks.
The sources asked not to be named because of the sensitive nature of GM’s discussions with its cash-strapped dealers.
Dealer representatives met on Tuesday in Detroit with GM Chief Executive Fritz Henderson and on Wednesday with GM sales chief Mark LaNeve, the sources said.
A GM spokesman confirmed that the meetings had taken place but declined to comment on the closed-door discussions.
Separately, Chrysler LLC executives, including sales chief Jim Press, held a conference call for dealers on Tuesday and met with key dealers on Wednesday, sources said.
“The message was that all the balls are in the air, but they were committed to trying to reach a deal with Fiat,” one Chrysler dealer who participated in the briefing said.
Chrysler could not be immediately reached for comment.
Both embattled automakers were meeting with dealers, with just weeks remaining to hammer out new concessionary deals with creditors and their major union under the threat of a government-sponsored bankruptcy instant cash loans.
Chrysler has until the end of April to conclude a deal with Italy’s Fiat SpA and win other needed concessions. GM has been given until June 1 to attempt its own out-of-court restructuring by U.S. officials.
GM dealers who met with executives in Detroit this week were told that the automaker has several interested potential investors in its troubled Hummer SUV brand and expected to have an offer that would keep the brand running, one of the people familiar with the discussions said.
GM’s Henderson had said in late March that a decision on Hummer could come within weeks. Henderson took over as CEO when the government ousted Rick Wagoner amid criticism he had moved too slowly on the automaker’s restructuring.
HOT BUTTON ISSUE
The issue of how many U.S. dealerships GM can support has been one of the hot-button issues for U.S. officials as they drive GM toward a stepped-up restructuring that many observers have now concluded will include a bankruptcy filing.
GM ended 2008 with over 6,200 dealers in the United States and had presented a plan to the U.S. autos task force, run by former investment banker Steve Rattner, that would have cut that by about 25 percent to near 4,100 over the next five years as dealers shut down or merged.