GM and Chrysler to review closures of angry dealerships
General Motors and Chrysler say they will re-examine decisions to close about 2,000 dealerships. They both went through separate bankruptcies after markets crashed last year. GM reckons it could save $2.5 billion annually by cutting about 1,300 dealers. Now, both firms will offer dealerships either reinstatement or an offer of binding arbitration, but only if Congress defeats legislation that would require all dealers to be reinstated. The federal government now owns 60% of GM and 10% of Chrysler, and those fighting the cuts (to save the jobs of ordinary Americans), include members of Congress who say taxpayers’ money shouldn’t have been used to close dealerships that were often profitable. The GM and Chrysler review mirrors the ongoing fight between government, giant firms and Wall Street over the massive bailouts during last years’ financial meltdown. Chrysler forced about 25% of its dealerships to close, and GM refused to renew franchise agreements with more than 1,000 of its dealerships. This has opened the way to a bitter legal battle across the spectrum of US interests. Read more: The New York Times, The Washington Post
Become an Insider