General Motors plans to eliminate about 400 dealerships a year until 2012, it told dealers today at the make meeting.
GM also said it wants to get back into leasing but doesn't have the money.
Dealers told Automotive News they tried to pin GM down on whether the store cuts would be by attrition, consolidation or buyout and were told only that it would be done market by market.
"They basically said, 'We're looking for strong dealers, and if you're not a strong dealer, you better evaluate your options,' " said Larry Dimmitt, owner of Dimmitt Chevrolet in Clearwater, Fla.
In a plan GM submitted to Congress in December, GM said it wanted to reduce its store count from 6,375 to about 4,700.
A GM spokeswoman confirmed the automaker told dealers that a 400-store reduction is a target, but said the number isn't set in stone. "We might only get to 1,500 rather than 1,700 dealers being eliminated," said Susan Garontakos.
GM will determine which dealerships it targets based on such criteria as the age of the store, location, volume, consumer satisfaction scores and capitalization, dealers said GM told them.
GM told dealers that proposed dealer sacrifices would be outlined in GM's Feb. 17 report to Congress, at which it is to provide a plan for long-term viability.
GM offered little hope it would return to extensive vehicle leasing soon. Said Fred Emich IV, co-owner of Emich Chevrolet in Denver: "They do not have the funds." c
Some dealers accused GM of working with GMAC to get rid of dealerships. They said GMAC set high capital requirements, knowing that certain dealers wouldn't be able to meet them. GM officials said they would not use GMAC to reduce dealer ranks.
Only about 1,000 to 1,500 dealers attended the meeting, which Dimmitt said featured "very little cheering."
Said dealerDuane Huff, of Fred Martin Superstore in Barberton, Ohio: "I have never heard so much outright hostility and negativity between GM and its dealers." c