General Motors is offering some dealerships $100,000 to $1 million to wind down their businesses over the next 17 months, according to three sources familiar with the proposals.
For Pontiac-only franchises, GM is offering only $10,000 to $200,000, according to two sources.
The offers are contained in so-called wind-down agreements that the bankrupt automaker has sent to dealerships that will not have their franchises renewed when they expire on Oct. 31, 2010.
Each dealership will be offered an amount based on its inventory, overall cost structure and regional rank, said GM sales chief Mark LaNeve in a Monday interview, without providing figures.
Following the interview with LaNeve, Automotive News spoke with dealers who had received a copy of the agreement. GM spokesman Pete Ternes declined to comment on the terms.
The money is intended to help dealers sell their remaining inventories. But if the dealer accepts the payment, GM will not buy the unsold inventory. In addition, the dealer must agree not to sue GM until their franchise agreement expires.
The terminated dealers also will not be allowed to order new cars from GM, yet they must stay in business until January. Ternes confirmed that provision.