At least 100 GM dealerships will be reinstated, Whitacre says
By: Chrissie Thompson, Automotive News
DETROIT — Ed Whitacre, General Motors Co.’s chairman, expects at least 100 GM dealerships will be restored in the arbitration process mandated by a new federal law. “I think a large number will get reinstated,” he said today in a meeting with reporters. “I think that’s a given. It’s in the hundreds.” The law, signed by President Obama last month, sets up a six-month period in which dealers can appeal their rejection to neutral arbitrators. Dealers have until Jan. 25 to give notice that they intend to file for arbitration.
An arbitration judgment must be handed down by June 15. In bankruptcy last year, Chrysler rejected 789 dealerships, while GM said it would wind down 1,350 through October 2010. GM used a “pretty arbitrary” cut-off point in choosing which dealers to reject and probably made some mistakes by cutting some good dealers and leaving some bad ones, Whitacre said. “The way it came out, if you fell above or below a line, you were removed,” he said. “But you had to do it that way. You can’t just go around flipping coins, so you had to have a process.” It was impossible for GM to have a perfect process, he said.
Arbitration could restore good and bad dealerships, Whitacre said. “The bad thing would be if they’re a lousy dealer that has a lousy storefront and through some process they’re put back in arbitrarily,” he said. “If they’re a good dealer and would really push GM in a classy manner, like we want it done, then it would be really good.”
Won’t hurt profits
Restoring dealers won’t jeopardize GM’s profits, Whitacre said. He thinks GM will be profitable in 2010. “You want to be a profitable company, and I think everything else just sort of flows from that — numbers of vehicles, how many fleet, how many in retail,” he said. “We’ve kind of restructured, put our priorities in the right place.” He said he does not feel pressure to take GM public this year. If the company does have an initial public offering in 2010, it would be late in the year, he said.
