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Hundreds of GM dealers could get their stores back

General Motors

General Motors

General Motors is preparing to provide some of its dealers with rejected franchises an opportunity to reinstate their stores, and the Detroit automaker plans to provide details during a Webcast today at 2 p.m. Last year, GM sought to wind down about 2,000 dealerships as part of its government-backed bankruptcy restructuring. A person close to the situation said today that GM plans to send a letter of intent to several hundred dealers who were identified to have their franchises pulled.

The letter will provide the dealers with instructions on how to apply for reinstatement, but those dealers must meet a number of qualifications, such as having adequate capital to operate and available financing, the person said. “What’s the criteria? That’s the million-dollar question,” said Tammy Darvish, a dealer who has been involved in negotiations with GM in an effort to win reinstatement for a group of 1,160 dealers who are protesting GM’s decision to shut them down.

GM’s criteria for reinstating dealers, Darvish said, “was always the hang-up” during negotiations between the protesting dealers and GM. Darvish, vice president of Darcars Automotive Group in Silver Spring, Md., said she expects that a large percentage of the dealers who will be offered reinstatement will be Cadillac dealers.
Darcars Automotive Group has one Chevrolet dealership affected by GM’s initial plan. In February, Mark Reuss, GM’s North America president, told journalists gathered at the National Automobile Dealers Association convention in Orlando that the automaker hopes to settle as many of the disputes as possible outside of arbitration.

GM ended 2009 with about 5,700 dealers, which includes dealerships that GM is trying to wind down or that are slated to lose a brand.

General Motors Plans to Reinstate Nearly

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