DETROIT – General Motors will keep open about 900 dealerships across the country that it had planned to close, a shift in corporate strategy that could preserve thousands of jobs.
The automaker will wind up with about 5,000 U.S. dealers in July, up from original plans for 4,100, Mark Reuss, GM’s North America president, told The Associated Press. It had about 6,000 when it filed for bankruptcy last year.
The change represents a desire by GM’s new leadership team to avoid the expense of closing dealerships, a step they say is not critical to bringing the company back to profits.
GM’s large dealer network “used to be one of our main, massive strengths,” Reuss told the AP. “I still think that’s true. It can be true with the right dealers.”
July is the end of a federally mandated arbitration process under which dealerships that GM and Chrysler Group had targeted could appeal. Partly because of GM’s strategy change, only about a quarter of the 1,576 cases brought by GM and Chrysler dealers remain before arbitrators.
“Everyone’s pretty excited,” said Bob Kapp, new car manager at Allen Chevrolet Cadillac in Monroe, Mich., which learned in April that it would be reinstated as a GM dealer and plans to hire 10 to 12 people as business picks up. “It was tough there for a while.”
GM on Tuesday would not estimate how many total jobs might be saved.
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