General Motors Co. plans to reinstate 661 dealers and may enter arbitration with as many as 400 outlets as the biggest U.S. automaker attempts to stem declines in domestic market share.GM offered franchise agreement letters to the dealers, North America President Mark Reuss said yesterday 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.”
The Detroit-based automaker 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.
I never worked in the auto industry but no one could explain to me how cutting dealerships could result in higher profits.
It's like Tyson Chicken deciding that if they quit selling chicken to Krogers they'll be more profitable. Huh?
I even posted this comment related to the closings back in May of last year.........
Once again, I still don't see how closing dealerships in and of itself makes a car company profitable.
But then again, I'm not as smart as though Government Motors executives making millions of dollars.
2 comments:
Gordon, you don't get it because you are not a card carrying member of the Party of Smart People.
Let's just say we will know GM will be around for a while when the government tells the dealers to raise prices, be rude to customers, shut down on Saturdays and run a billion dollar loss over the next ten years. That's how we know the post office is in for the long haul.
Come on now, the answer is easy. The government only operates cost centers--not profit centers. Less dealers means less cost centers and thus more profit! You obviously don't have an Ivy League education...
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