SAN DIEGO -- Hyundai has put the word out to 50 underperforming dealers - shape up within six months or ship out.

Strongly worded letters have gone out to "chronic underachievers," says Hyundai Motor America COO Steve Wilhite.

"We've said: 'Guys we can't accept this,' " Wilhite told Automotive News at a press event here. The letters went out during the past two months.

"These 50 chronic underachievers have a real poor level of sales and customer service," Wilhite said. "We're giving them six months to correct the mistakes. If they can, we're thrilled to have them. If they can't, we want them to turn in their franchises."

Wilhite said the dealers, which are various sizes, are scattered across the country. Before a dealer can be terminated, cases must go to the motor vehicle board in the dealer's state. Either side can appeal to other state courts.

In addition to the not-so-nifty 50, Hyundai also has identified 144 problems at several other dealerships, Wilhite said. The problems include substandard facilities, poor management teams, a capital shortage and lousy locations. He wouldn't say how many dealerships are affected.

Those stores do not face the six-month deadline, but have been told to get busy making improvements.

"We've made incredible strides in product quality and breadth of product," said Wilhite, who was named COO in August. "But if at the end of the day you go into a dealership and have a bad experience, it's all for naught."

Hyundai has 754 U.S. dealers. Wilhite said dealership profitability averaged 1.4 percent of sales in 2006, compared with a national average for all franchises' dealers of 1.6 percent.

"That's unacceptable," he said. "We need to push for 2.5 percent, or why are we in business?"

Wilhite said he wants Hyundai dealers to achieve that goal within two years.

You may e-mail Kathy Jackson at kjackson@crain.com