DETROIT -- The participation agreements that surviving GM dealers sign will be used as a tool to reward dealer performance and weed out underperforming stores.
If they dont perform to those performance levels, it will be cause for us to seek termination, CFO Ray Young said in a conference call today with media and stock analysts.
Young said measuring dealer performance is a very, very important element of our dealer strategy in the future.
GM said yesterday that it will require surviving dealers to sign the agreements, requiring them to meet performance guidelines -- including facilities standards, sales and customer satisfaction.
Dealers signing the agreements will have contracts with the new GM, which is buying most company assets out of Chapter 11 reorganization. Others will remain with the old company, which will be liquidated.
Young said GM wants to reduce its dealer body over the next 18 months to about 3,600 stores from 5,969 now. Reductions will include 1,100 stores already notified that they will be dropped, 200 more getting letters this week and natural attrition, he said.
During the call, Young also said:
GM is not releasing the name of a buyer of the Hummer brand at the buyers request until the deal is final, which Young said is expected by the end of the third quarter. He said GM initially will sell vehicles to the new owner.
GM is weighing 16 prospective buyers for the Saturn brand. The biggest issue to be resolved, he said, is the business model -- whether GM continues to provide vehicles to Saturn or whether the new owner finds another source.
GM expects to continue joint product development with the new partnership owning Opel. Said Young: We anticipate that that engineering center will play a major role for us globally.