Chrysler, GM to cut 2,000 dealerships

The automakers appear likely to give affected dealers little or no compensation, even though franchise owners typically spend big bucks on showrooms. “This is just another example of Wall Street squeezing Main Street,”…

The Boston Herald
May 14, 2009

Chrysler, GM to cut 2,000 dealerships
Jerry Kronenberg

Chrysler is expected today to identify some 800 U.S. dealerships that it wants to shutter, with General Motors following suit tomorrow with as many as 1,200 closure notices of its own.

The struggling carmakers are slashing dealerships as part of government-orchestrated attempts to save the U.S. auto industry.

Both firms have received huge government bailouts that require radical restructurings.

Chrysler filed for bankruptcy April 30, while GM appears likely to do the same June 1.

Observers expect Chrysler to identify 800 of 3,200 U.S. dealerships slated for closure.

Tomorrow, GM plans to notify 1,000 to 1,200 of 6,200 U.S. dealers of similar plans. Another 1,400 to 1,600 GM dealers will get closure notices down the road.

The automakers appear likely to give affected dealers little or no compensation, even though franchise owners typically spend big bucks on showrooms.

“This is just another example of Wall Street squeezing Main Street,” said Robert O’Koniewski of the Massachusetts State Auto Dealers Association, whose members own some 160 Chrysler and GM lots.

http://www.bostonherald.com/business/general/view/2009_05_14_Chrysler__GM_to_cut_2_000_dealerships/


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