After Chrysler LLC closing thousands of dealerships, Now General Motors (GM) have now issued their closing list of dealerships.
CBS News said GM, restructuring itself in the midst of a prolonged sales slump, would notify about one-sixth of its dealerships that they were no longer a viable option for the company. They would have until October 2010 to close, CBS said.
Analysts said the move could push GM into a legal corner that makes bankruptcy inevitable. Closing dealerships without declaring bankruptcy could otherwise lead to legal clashes with the outlets that were forced to close.
The U.S. Treasury Department said Thursday that the Chrysler’s move to severe ties with 789 of 3,200 dealerships was good for the company and the industry.
The Treasury, in a statement, said all 3,200 dealerships would have folded if the company had been forced to liquidate.
John McElenery, chairman of the National Automobile Association, said 200,000 jobs would be lost as the dealerships closed.
GM, which has accepted $15.4 billion in federal loans, has said it would close 16 factories this year and aims to lay off 27,000 workers.
The company has until June 1 to trim its debt and find union concessions to qualify for more federal assistance.
May 2009
by it-echounder: News
Tags:General Motors Dealers