Arbitration Saves Some GM Dealerships from Shutdown
Tuesday, January, 28, 2014
The General Motors Corporation (GM) has announced that after Federally-mandated arbitration proceedings, it will be notifying some of its dealerships that had been marked for termination that they will be allowed to continue doing business as GM franchises.
GM originally announced that 1,300 of its dealerships would be shut down as part of the bankruptcy deal struck with the Federal Government during the 2009 restructuring that saw the U.S. Treasury take an ownership stake of 60% in the company in order to keep it from closing down. 1,160 of these dealerships opted to request arbitration with GM over the decision as was their right under law. After the arbitration process, GM announced that some of these dealerships would be allowed to continue to operate, though exact numbers were not made public.
The dealers not included in this decision can continue to operate, but they will no longer be GM-sponsored dealerships and will have no direct connection to GM’s operations, including any special pricing or promotions. GM has seen a return to profitability after the 2009 bankruptcy and has been making moves to reduce the Treasury’s stake in the company in recent years.