Business

March 6, 2010

General Motors plans to reinstate dealers

KATIE MERX Bloomberg News

SOUTHFIELD, Mich. — General Motors plans to reinstate 661 dealers and may enter arbitration with as many as 400 outlets as the automaker attempts to stem declines in U.S. market share.

GM offered franchise agreement letters to the dealers, North America President Mark Reuss said Friday in a conference call. The company has about 5,500 outlets.

“We are eager to restore relationships with our dealers,” said Reuss. “The arbitration process creates uncertainty in the market. Issuing these Letters of Intent is good for our customers, our dealers and GM.”

MotorWorld in Plains Township was originally stripped of its Buick, Cadillac and GMC truck franchises. The dealership, part of Maryland-based Mile One Automotive, appealed the decision, MotorWorld President Gerald O’Donnell said last year, but it could not be determined Friday if it would be reinstated.

The dealership also sold GM’s Pontiac line, which is being discontinued.

GM is trying to increase U.S. sales and market share while trimming four of its eight brands. Chief Executive Officer Ed Whitacre named Reuss, 46, to the post in December in a shuffle of top managers.

GM accounted for 19.9 percent of U.S. sales of cars and light trucks last year, a drop from 22.3 percent in 2008, according to Autodata Corp. in Woodcliff Lake, N.J. Ford beat GM in monthly sales in February for the first time since 1998.

The company began to re-evaluate the closing of 1,100 retailers after Congress passed a law in December to give GM dealers who lost or were scheduled to lose franchises the right to hearings. The binding arbitrations may reverse GM’s terminations.

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