General Motors to Reinstate over 600 Dealerships

Good news is coming for over 600 of the 2000 General Motors dealers that had received notice that they would be losing their franchise licenses when those licenses came up for renewal this October. Although GM would not commit to the exact number, several media sources are saying numbers between 601 and 661 dealers. As mentioned several months ago here, the letters contain some GM core business criteria and that following those actions will allow the dealers to immediately resume to business as usual. It was discussed in earlier articles that some of these criteria would help some GM stores move into the current era with more modern and nicer physical facilities to compete with many of the other brands like Toyota, Honda and VW  that have rebuilt their physical image years ago.

Once the original closer letters came out there were approximately 1,100 dealer arbitration claims, of which GM reviewed each of them. Capitol Hill pushed a plan to the arbitrators to help balance interests of the threatened dealerships, General Motors and the public when considering reinstatement. The criteria  will include:

    Dealership Profitability - How profitable has the dealership been over the last 4 years.
    
    GM's Overall Business Plan - How does the dealership plan to support GM's post bankruptcy plans

    Dealer's Current Economic Viability - Are dealers adequately capitalized

    Dealership Performance in accordance to GM's Criteria - How has the dealer performed in relation to customary and regular business objectives such as sales,          capitalization, profitability and CSI. This is also the area that will review the dealer's physical facility and image representation of the brand.

    Local Economic Conditions - Consider local conditions that could have contributed to the poor dealership performance

The dealerships that have received the new letters of intent will avoid the arbitration process.