DETROIT -- Ed Whitacre, General Motors Co.'s chairman, expects at least 100 GM dealerships will be restored in the arbitration process mandated by a new federal law.
“I think a large number will get reinstated,” he said today in a meeting with reporters. “I think that's a given. It's in the hundreds.”
The law, signed by President Obama last month, sets up a six-month period in which dealers can appeal their rejection to neutral arbitrators. Dealers have until Jan. 25 to give notice that they intend to file for arbitration.
An arbitration judgment must be handed down by June 15. In bankruptcy last year, Chrysler rejected 789 dealerships, while GM said it would wind down 1,350 through October 2010.
GM used a “pretty arbitrary” cut-off point in choosing which dealers to reject and probably made some mistakes by cutting some good dealers and leaving some bad ones, Whitacre said.
“The way it came out, if you fell above or below a line, you were removed,” he said. “But you had to do it that way. You can't just go around flipping coins, so you had to have a process.”
It was impossible for GM to have a perfect process, he said.
Arbitration could restore good and bad dealerships, Whitacre said.
“The bad thing would be if they're a lousy dealer that has a lousy storefront and through some process they're put back in arbitrarily,” he said. “If they're a good dealer and would really push GM in a classy manner, like we want it done, then it would be really good.”
Won't hurt profits
Restoring dealers won't jeopardize GM's profits, Whitacre said. He thinks GM will be profitable in 2010.
“You want to be a profitable company, and I think everything else just sort of flows from that — numbers of vehicles, how many fleet, how many in retail,” he said. “We've kind of restructured, put our priorities in the right place.”
He said he does not feel pressure to take GM public this year. If the company does have an initial public offering in 2010, it would be late in the year, he said.
Whitacre has served as interim CEO since Dec. 1, when the GM board ousted Fritz Henderson. The company is conducting a nationwide search for a new CEO. Whitacre said today that new CFO Chris Liddell could be a candidate, if the board thinks he performs well. GM installed Liddell last month after he said he was leaving his position as Microsoft's finance chief.
No money for Saab
Whitacre said he has little hope of finding a buyer for Saab.
“It's real easy,” he said. “Just show up with the money and you can have it, and nobody's showing up with the money.”
Whitacre said he didn't see how GM could have tried any harder to sell the brand.
The automaker said earlier that it will continue to wind down Saab as it entertains bids.
Spyker Cars NV, a small Dutch automaker, has shown the most interest in Saab since GM's deal to sell it to Koenigsegg Group AB, a tiny Swedish automaker, fell through in November.