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General Motors Corporation has announced it will cut thousands of its dealerships across the nation, but the local impact of that is still unknown.
David Hook, owner of Bob Hook Chevrolet of Shelbyville, said Thursday he still hasn’t heard anything from GM about whether or not his dealership will be a part of the leaner, more cost effective “New GM” expected to launch in the next 60 to 90 days as a separate company from the current GM.
While Bob Hook’s future is unclear in Shelbyville, about 15 miles north of the dealership sits another GM dealer that has heard some good news.
Browning Chevrolet, Pontiac, GMC, a 50-year-old family owned business in Eminence, received a letter from General Motors Corporation a few weeks ago notifying the dealer it was selected to continue dealing with Chevrolet and GMC vehicle brands.
The letter stated: “Part of GM’s restructuring efforts include plans for a dealer network consisting of fewer, stronger and more properly located dealers which we hope will allow for higher through-put and enhanced business potential. Your selection as a dealer for the Chevrolet, GMC brands shows the confidence we have in your dealership being part of the new GM.”
GM filed for bankruptcy protection on June 1 and has notified about 1,100 dealers, which make up 20 percent of its dealers in the U.S., that they will be cut as of October 2010 in a restructuring effort to reduce the automaker’s costs.
The notifications cover less than half of the total cuts that will be made, as GM plan to drop around 2,500 of its 6,200 dealerships.
A press release from GM discusses the changes: “It will be built from only GM’s best brands and operations, and it will be supported by a stronger balance sheet due to a significantly lower debt burden and operating cost structure than before. The New GM will incorporate the terms of GM’s recent agreements with the United Auto Workers (UAW) and Canadian Auto Workers (CAW) unions and will be led by GM’s current management team.”
Despite dealers being cut, GM promises it will honor existing warranties, and customers of discontinued brands or dealerships will still be supported by other GM dealerships.
In a press release, GM president and CEO Fritz Henderson said some good would come from the economic doom and gloom.
“The economic crisis has caused enormous disruption in the auto industry, but with it has come the opportunity for us to reinvent our business,” he said.