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Friday, March 05, 2010

GM back on track no longer closing 661 dealerships

GM plans to call representatives of all 661 rejected dealerships by late Monday to notify them of its intent to begin settlement talks, Bunnell said. It will start sending two-to-three-page letters of intent by the end of next week for dealers to sign and return within 10 days, he said.

Dealers then will have 60 days from the day they sign to send documentation complying with requirements in the letter, such as information about working capital, location, licensing, facilities and floorplan financing.

They also will have to return any wind-down money received from GM as they prepared to close by October. Dealerships received between $5,000 and $1 million in wind-down money, depending on their size, Bunnell said.

Once dealers comply with all the requirements of the letter of intent, they can start ordering cars from GM, Bunnell said.

The 500 or so dealers not designated for reinstatement can still ask to be considered for settlement talks, he said. Dealers who prefer financial compensation over reinstatement can request that option, Bunnell said. GM will arbitrate the remainder.

GM's action was hailed by House Majority Leader Steny Hoyer, D-Md.,who was instrumental in getting the arbitration law passed.

Said Hoyer: "It is encouraging news that GM is allowing so many dealerships the chance to reopen without arbitration."

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