honoluluadvertiser.com

Sponsored by:

Comment, blog & share photos

Log in | Become a member
The Honolulu Advertiser
Posted on: Friday, May 8, 2009

Chrysler, GM to cut up to 2,000 dealers

Los Angeles Times

In the next seven days, General Motors Corp. and Chrysler will tell as many as 2,000 dealers they are no longer wanted. They won't go without a fight.

GM, which posted a $6 billion quarterly loss yesterday, plans to notify between 1,000 and 1,500 dealers early next week that it will not renew their franchises, according to company officials. That group — which does not include dealers of brands slated for elimination or sale — represents the largest share of the 2,600 dealers GM told the Obama administration it would eliminate by the end of 2010.

Separately, Chrysler, which filed for bankruptcy protection in New York last week, is expected to notify roughly 800 of its 3,200 dealers as soon as today that it will tear up their contracts, potentially reducing its nationwide dealership count by a quarter.

The two imperiled automakers, which have borrowed $20 billion from taxpayers, say cuts are needed to reduce costs and return to viability.

But it amounts to a bloodbath for dealers, who employ hundreds of thousands of people nationwide and pump billions into their area economies. With dealers unsure if their name will be called, a pervasive sense of dread has crept into showrooms.