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General Motors slashes dealerships

Published 15/05/2009

US car giant General Motors announced today it is to slash the number of its dealerships in a further sign of the deep trouble the country's auto industry finds itself in.

General Motors (GM) said 1,100 dealers would be informed today that their franchise agreement will be ended as part of a plan that will see more than 2,600 close by 2010.

It comes a day after fellow struggling car maker Chrysler announced it was to drop a quarter of its 3,000-plus dealerships.

The move is likely to result in further heavy job losses in a sector that has already seen mass redundancies.

While many of Chrysler's dealers sell vehicles from other makers, GM dealerships tend to sell only cars from the firm they represent.

Being dropped by GM will lead to a far greater risk of having to close down permanently.

The dealership cuts are the latest blow to the car industry.

Chrysler is operating under bankruptcy protection while it works towards a tie-up with Italian car giant Fiat.

GM has until the end of this month to prove to the White House that it has a viable business plan. Many believe it will follow Chrysler into bankruptcy.

Belfast Telegraph

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