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For 661 Shuttered GM Dealerships, the Road Back Won't Be Easy

March 29, 2010
2 min to read


Hundreds of dealers given a second chance at keeping their General Motors franchises have about two months to prove to the company that they've met the requirements to start selling Chevrolet, Cadillac, Buick and GMC vehicles again, the Detroit Free Press reported.


Key on the to-do list: Dealers who received payments to close their GM franchises must repay the money and prove they have enough credit lined up to buy new GM cars and trucks to sell, a copy of the agreement obtained by the Detroit Free Press says.

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During its bankruptcy, GM moved to close about 2,000 dealerships, saying they were not needed. Earlier this month, however, GM offered 661 of the 1,160 dealers fighting the loss of their franchises the chance to get them back.


GM, whose U.S. sales are up 13% this year, is fighting aggressively for sales as it bounces back from bankruptcy.


Though General Motors is trying to get past problems with dealers as quickly as possible, Steve LaBelle's lawsuit filed in Massachusetts shows how complicated the process is for the automaker.


LaBelle was one of the 1,160 GM dealerships to file for arbitration, to fight to keep from losing his Chevrolet franchise. In the meantime, GM allowed a dealer from a neighboring community to move into LaBelle's sales area, according to the lawsuit filed in early March.


LaBelle, whose dealership is in Bridgewater, Mass., a town about 45 minutes south of Boston, is trying to get an injunction to keep that competitor from selling new GM vehicles until his arbitration is resolved.

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It's a complicated situation inherited by Mark Reuss, who became GM president of North America in December, following a management shake-up that included Fritz Henderson resigning as CEO and Chairman Ed Whitacre assuming chief executive duties.

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