GM: Hundreds of Dealerships Could be Restored

Hundreds of the 1,350 General Motors Co. dealers who lost their franchises last year could see them restored in a congressionally mandated arbitration process that begins later this month, the company's interim CEO told The Associated Press.

CEO and Chairman Ed Whitacre Jr. also said that new Chief Financial Officer Chris Liddell is a candidate for the CEO post. And Whitacre said he's not confident about selling the Swedish Saab brand.

In a wide-ranging talk with reporters at GM's Detroit headquarters, Whitacre also predicted that GM would be profitable this year, although he said that was dependent on the economy and other factors.

The 1,350 dealerships, which were allowed to stay open until October 2010, were targeted as part of an effort to dump poor performers and better align its dealer base with much lower consumer demand for autos. In many cases, GM had dealerships too close to one another and competing on price, the company said.

Congress passed legislation late last year that forces GM and Chrysler Group LLC, which shed 789 dealers last year, to give dealers a chance to appeal closure decisions. Both companies went through bankruptcy protection earlier this year and are receiving government aid.

Whitacre said GM had a "pretty arbitrary cutoff point" for shedding dealers, and that it probably made mistakes in getting rid of some of them.

When pressed, he said "hundreds of dealers" may be closer to 100 than a thousand, but it's a "substantial number."

When the franchises were revoked last summer, GM officials said dealers were judged on whether they met sales goals, customer service scores, the condition of their buildings and other criteria. They were allowed to stay open through October of this year to sell their inventories.

Under pressure from dealer groups and lawmakers, GM and Chrysler put out proposals that would have allowed dealers to challenge closures in arbitration. But a bill passed by Congress allows them to bring a much wider range of proof that they are profitable.

Dealers have until Jan. 25 to tell the automakers if they will appeal.