DETROIT -- Seeking peace with dealers, General Motors Co. plans to reinstate 661 dealerships.
Late this week, GM will start sending letters that say the automaker wants to reinstate those rejected dealerships without arbitration.
“We end what has been a really tough time for lots of people inside, outside the company, lots of communities, lots of dealerships,” Mark Reuss, GM’s president for North America, said last week during a conference call with journalists.
“We’re looking forward to wipe the slate clean.”
Last year, before its bankruptcy, GM had decided to cut about 1,350 stores and an additional 650 franchises at dualed dealerships by November of this year. Later, 1,160 stores applied for arbitration under a federal law.
After GM made its reinstatement announcement last week, GM field reps were planning to place heads-up calls to dealers at the 661 stores by the end of the day today, March 8, said Jim Bunnell, general manager of dealer network support.
Once the dealers get the letters, they have 10 days to respond. Then dealers have 60 days to comply with GM’s requirements for facilities, capitalization, location, licensing and floorplan.
Bunnell said he expected a “vast majority” of the dealers to meet GM’s terms. To choose the dealers, GM looked “through the eyes of the arbitrator” and re-examined the standards it first used in picking dealerships to wind down, Bunnell said.
Those criteria include profitability, customer service scores, sales effectiveness and working capital, he said. Reuss said he still hopes to settle with the remaining dealers and avoid arbitration. If that’s not possible, GM will arbitrate with them.
Reuss declined to comment on the mix of brands in the 661 stores.