GM wants to restore more ‘good dealers’ :


General Motors Company Chairman Ed Whitacre said today that he want “a lot more” rejected dealerships to be restored only if they are good dealers. Talking to the Detroit Auto Show, Whitacre went beyond remarks he made last week, expressing his preferences and hinting at how General Motors will proceed in upcoming arbitration.

Last week, Whitacre said that “a large number” of dealerships will be restored in arbitration for more than 100. In a statement later posted on its website, GM said it is difficult to say how many dealerships will be restored. It could be some one hundred and more than one hundred. Dealer attorney Leonard Bellavia said last week he suspected that GM wants to restore rejected  dealerships to try to increase sales. While asking about this, Whitacre said: “I want them to be restored if they’re good dealers.” Good dealers will increase sales. If they are good dealers, we’ll take a lot more.

Under the arbitration process outlined in a law signed by President Barack Obama last month, rejected dealerships have until Jan. 25 to give notice that they intend to file for neutral arbitration. Arbitrators have until June to hand down decisions on any dealer appeals that are submitted. GM has the discretion to influence the process by calibrating how staunchly it opposes any dealer appeal. By not submitting a response to arbitrators or by expressing lukewarm opposition, the company could signal that it doesn’t object to reinstatement of a particular dealer.

Whitacre said last week that GM used a “pretty arbitrary” cutoff point in choosing the 1,350 dealerships it rejected and probably made mistakes by cutting some good dealerships and leaving some bad ones. “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.”

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