NEW YORK — General Motors Co. will reinstate 661 dealerships it sought to drop from its sales network.
GM executives said Friday that the dealerships — more than half of the 1,100 seeking to stay with the automaker — will receive letters giving them the option to remain open. The company said it made the move because it would not have enough time to negotiate with all 1,100 dealerships within a four-month window imposed by the federal government.
At least five Colorado auto dealers will get reinstated, said Tim Jackson, president of the Colorado Automobile Dealers Association.
“We know, right now, of five dealerships that will get a letter of intent to reinstate,” Jackson said Friday. “My calculations have us restoring about 10 to 12. That’s a conservative figure.”
The five that are on track for reinstatement are outside the Denver metro area, with two on the Western Slope, and one each in northern and southern Colorado and on the Eastern Plains.
“So far, it is the GM stores that had the Cadillac brand, and then the Cadillac brand had been terminated,” Jackson said.
GM had previously shuttered 25 dealerships in Colorado and 1,400 nationwide.
GM’s decision to keep the additional showrooms open effectively shrinks the number of appeals it has to contend with. Arbitration hearings for the dealers who did not get offers will begin later this month.
“By doing this, we save a lot of time, energy and dollars,” said Jim Bunnell, GM general manager of network support, saying the company wished to avoid a “very large arbitration process.”
As part of its restructuring, GM last year told about 2,000 dealerships it would not renew their franchise agreements once they run out in October 2010. But the dealerships have said GM treated them unfairly, and last month, Congress passed a law requiring an appeals process for the dealers. About 1,100 dealers have appealed GM’s decision.
The cuts to GM’s 6,000-dealer network were designed to compensate for much lower demand for cars and trucks, but some dealers have argued that lots that are still profitable are at risk, and that the automaker hasn’t offered enough details about how it’s choosing which businesses to shutter.
GM would not offer any details on Friday about which dealerships it was reinstating and where they are located. The company said it hoped to have every letter of intent with dealerships by Monday. At that point, dealers have 10 days to respond and 60 days to meet a set of criteria that would allow them to stay with GM.
