GM plans to reinstate 661 dealers to shore up sales image

General Motors said Friday that it planned to reinstate 661 dealers that it cut last year as part of its bankruptcy reorganization, The New York Times’s Nick Bunkley reports.
The number is more than half of the nearly 1, 100 dealers who challenged G.M. termination decision, and allows the company to avoid costly arbitration.

G.M. said that it was calling and sending letters to the dealers being allowed to stay open and that they would receive notification by Monday.

“By doing this, we save a lot of time, energy and dollars, saving us and dealers from going through what could be a very long arbitration process,” Jim Bunnell, G.M.’s general director of dealer network support, said in a conference call with reporters.

GM accounted for 19.9 percent of U.S. sales of cars and light trucks last year, a drop from 22.3 percent in 2008, according to Autodata Corp. in Woodcliff Lake, New Jersey. Ford Motor Co. beat GM in monthly sales in February for the first time since 1998.

The dealer reinstatement plan “is a good thing,” said Maryann Keller, president of Maryann Keller & Associates in Stamford, Connecticut. “There were false economics in terminating that many dealers. If they restore what they’ve lost and put back into business dealers that were financially viable, then they will gain sales.”

Via: Bloomberg