As General Motors promises dealers it will preserve its brands, GM is revising its franchise agreement in a way that some dealers and dealership attorneys say could make it easier to kill a vehicle line.
This summer, GM will present a revised franchise agreement to dealers. In a preliminary draft, the automaker has deleted a clause that Oldsmobile dealers used to sue GM after it announced plans in 2000 to eliminate the brand.
That clause committed GM to "permit each dealer the opportunity to achieve a reasonable return on investment." Several dealers claimed GM violated that provision when it killed Oldsmobile.
The revised agreement could spell difficulty for troubled brands and the dealerships that sell them, say several dealership attorneys.