General Motors plans to keep nearly 600 of the approximately 2,000 showrooms it originally planned to scrap in an effort to restructure the troubled company. “GM executives said Friday that about 600 dealerships out of the 1,100 seeking to stay with GM will receive letters giving them the option to remain with the automaker. The Detroit automaker last year told 2,000 dealerships it would revoke their franchise agreements in October 2010 as part of its restructuring. The company has said it needs to shrink the number of showrooms to keep the remaining ones healthy. The dealerships, who say they have been treated unfairly, have been appealing the decision.
The cuts to GM’s 6,000-dealer network were designed to compensate for much lower demand for cars and trucks, but some dealers have argued that lots that are still profitable are at risk, and that the automaker hasn’t offered enough details about how it’s choosing which businesses to shutter. GM and Chrysler, which has slashed 789 dealers, have said they would reconsider the cuts. The decision was a compromise meant to avoid federal legislation that would require that the showrooms be kept open. Under the revised plans, dealerships would get face-to-face reviews, binding arbitration and faster payments to help dealers slated for shutdown.”