600 GM dealerships will stay open
General Motors Co. will reinstate more than half the U.S. dealerships it targeted to drop from its network.
In Minnesota, 20 of the 30 dealerships that were fighting GM via arbitration to stay in business have been reinstated, according to figures released Tuesday. Four others were previously saved from the chopping block, including the Lupient Viking Buick Pontiac GMC Nissan dealership in Rochester.
The Minnesota Auto Dealers Association had estimated that 3,200 jobs in the state were in jeopardy as General Motors and Chrysler, also paring its network, shuttered dealerships. The state's new car dealerships accounted for $10 billion in revenue and nearly 19,000 jobs in 2008, the most recent year for which figures were available, according to the National Automobile Dealers Association.
Scott Lambert, executive vice president of the dealer group, now estimates 500 jobs in the state will be saved.
Although neither he nor GM is releasing names of the spared dealerships, Lambert notes they appear to be disproportionately in rural communities.
"It's huge" for those towns, said Lambert. "These are jobs with health care benefits and good wages. They're the kinds of jobs you can raise a family on."
GM executives said Friday that about 600 dealerships out of the 1,100 seeking to stay with GM will receive letters giving them the option to remain with the automaker.
GM last year told 2,000 dealerships it would revoke their franchise agreements in October 2010 as part of its restructuring. The company has said it needs to shrink the number of showrooms to keep the remaining ones healthy.
The dealerships, who say they have been treated unfairly, have been appealing the decision.
The cuts to GM's 6,000-dealer network were designed to compensate for much lower demand for cars and trucks, but some dealers have argued that lots that are still profitable are at risk, and that the automaker hasn't offered enough details about how it's choosing which businesses to shutter.
GM and Chrysler, which has slashed 789 dealers, have said they would reconsider the cuts. The decision was a compromise meant to avoid federal legislation that would require that the showrooms be kept open.
Under the revised plans, dealerships would get face-to-face reviews, binding arbitration and faster payments to help dealers slated for shutdown.
Congress-brokered talks between dealer groups and the automakers began in September. But those talks stalled over disputes about the review process for targeted dealerships and other issues. Looming over the fight has been the threat of federal legislation to deal with the closures. Lawmakers warned that if a deal wasn't reached, that legislation would move forward.
The White House has opposed the legislation over concerns that it could hurt GM's and Chrysler's efforts to rebound from their government-led bankruptcies.