DETROIT -- To help curb growing anxiety over General Motors new participation agreement for dealers, GMs sales chief says he will send a letter of clarification to dealers early next week.
GMs Mark LaNeve, vice president of vehicle sales, service and marketing, was schedule to meet with leaders of the National Automobile Dealers Association Friday to discuss requirements GM is making in a proposed participation agreement. The company wants dealers to sign that proposal by June 12.
GM hasnt disclosed how many dealers received the participation proposal, but presumably it was the targeted number of surviving dealers: 3,600 to 3,800.
If dealers dont sign the agreement, they will be terminated in U.S. Bankruptcy Court. On Monday, June 1, GM filed for Chapter 11 bankruptcy protection in New York.
LaNeve said the letter likely will go out Monday, June 8.
NADA is a little worried. They have the concerns that this is a doomsday scenario, LaNeve told Automotive News. But weve never acted that way.
GMs proposal says it will require surviving dealers to make such changes as upgrading dealerships, increasing sales and inventory and carrying only GM brands in a showroom. LaNeve said he will clarify that all these demands will be carried out in a reasonable way, with GM working with each dealership.
Well work with them to say, How much time do you need to cure any out-of-compliant condition? LaNeve said. If we wanted to terminate them, wed have given them a wind-down letter, not a participation letter. These are the dealers we want to go forward with us.
As of last night, LaNeve said, 1,700 of GMs 6,000 dealers have given verbal commitments to sign either a wind-down contract or participation contract. Of those, 1,200 dealers have sent in signed contracts. LaNeve said 30 dealers are opting to not sign any contract.