Daily Auto News Automakers Reconsider Closing Some Dealerships
Daily Auto News
General Motors and Chrysler, between them, have announced plans to close more than 2,000 U.S. auto dealerships over the next several months. Now, several reports say, the two could change their minds.
The Washington Post reports, “some of the targeted locations could be allowed to stay open. The move comes in response to protests by scores of targeted dealers, who have vigorously fought the proposed closings with the help of industry groups.” The dealerships have been “pressuring members of Congress to pass legislation that would force the companies to keep the dealerships open.”
The automakers were anxious to keep such legislation off the table. Iowa’s Sioux City Journal reports, “Staving off that threat, the automakers agreed Monday to a compromise in which they promise to reconsider the closings. Under the plan, targeted dealers will get face-to-face reviews and access to binding arbitration. GM, the largest U.S. automaker, also said it would be more transparent about how it picked the dealers that will close.”
GM has explained its arbitration process, but Chrysler has not yet released its plans. Autoblog reports that GM’s plan “will allow these affected dealerships to get some real-life face time with the automaker to hear exactly whey they were targeted for closure. If the dealer still isn’t happy with the outcome, it can elect to enter binding arbitration. If that arbiter finds that GM chose to shutter the dealership for anything other than sound business reasons, the franchise stands to be reinstated.”
The changes may not help all dealers affected by the closings. Robert O’Koniewski of the Massachusetts State Automobile Dealers Association told the Boston Globe, “For a lot of dealerships, the train has left the station. They’ve already engaged in some sort of shutdown or wind-down process.”
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