GM Seeks to Reinstate 661 Rejected Dealerships

General Motors said it plans to reinstate 661 of the 1,160 rejected dealerships that applied for arbitration to get their franchises back, scrapping a nine-month plan to reduce its showroom network by 40 percent. The decision to begin settlement procedures as early as next week stemmed from a desire to avoid the rigors of congressionally mandated arbitration, GM executives said.

Letters of intent are scheduled to start going out as early as Wednesday, March 10. The process could take just a few weeks for some dealers and as long as several months for others, they said. GM hopes to have the effort completed by mid-summer. “By doing this we save a lot of time and energy and dollars,” Jim Bunnell, GM’s general manager of dealer network support, said during a conference call with reporters. Susan Docherty, GM’s U.S. marketing chief, said the company decided “it would have been impossible to arbitrate 1,100 cases in a 120-day period.”

A law signed by President Barack Obama in December requires that arbitration be completed by mid-June. Arbitrators have the option of a one-month extension. Before its bankruptcy reorganization last spring, GM had planned to reduce its 6,150-dealership network to 3,600 by the end of this year. Today’s reinstatement decision could leave GM with 4,500 to 5,000 U.S. dealerships

Neil Roland and Chrissie Thompson: Automotive News