Business

GM to reinstate 20-25 dealers in N.C.

Posted March 8, 2010 2:09 p.m. EST
Updated March 8, 2010 9:12 p.m. EST

— Twenty to 25 North Carolina dealerships are among the 661 dealerships nationwide that General Motors Co. plans to reinstate, the North Carolina Automobile Dealers Association said Monday.

GM cut its franchise ties with 1,160 dealers nationwide last fall as part of its bankruptcy proceedings in an effort to compensate for much lower demand for cars and trucks. Some dealers have argued that lots that were still profitable were cut, and that the automaker didn't offer enough details about how it's choosing which businesses to shutter.

Congress mandated hearings on the dealers complaint late last year. All of those that are being reinstated were involved in that arbitration.

GM would not offer any details on Friday about which dealerships it was reinstating and where they are located. It said it chose the 661 based on a variety of criteria, including sales and other business factors.

North Carolina dealers have already begun to receive phone calls from GM representatives about reinstatement letters that could come as early as this week, NCADA President Robert Glaser said.

“This is huge for those North Carolina dealers who are being reinstated,” Glaser said in a statement. “These dealerships will be able to rehire employees and once again start contributing to their communities, sponsoring Little Leagues and supporting local charities.”

In 2009, North Carolina lost an estimated 50 GM dealerships as a result of the GM bankruptcy. While a few of those dealerships have already closed their doors, the majority have been operating under a “wind-down” agreement with GM.

“This has been an extremely difficult period for our franchised dealers and their employees,” Glaser said. “We are thankful that GM is taking steps to reinstate dealers and we believe this is an important step in the recovery of the auto industry."