Chrysler dealerships
Car sales are on the decline. That is why Chrysler filed for bankruptcy.
The single objective for a General Motors dealer Friday was to not get the letter, believed Carroll Smith, owner of Monument Chevrolet in Pasadena.
Smith was referring to the notice GM sent to about 1,100 of its dealers, informing them that they would have to close up by late next year.
Only one day before, Chrysler sent a related message to 789 of its dealers. ?For car dealers this is a very dark time,? he said.
Smith said he didn?t get the bad news Friday, but he still was sad.
?What is the cause for the closings?? he said. ?We are of no price to the manufacturers. We are their income.?
GM protected the move in a news release and conference call Friday, saying that it wants to step advance with ?fewer, stronger brands? and ?fewer, stronger dealers.?
Moreover, a number of the completed dealerships would have possibly been forced to close up on their own, said Mark LaNeve, GM?s vice president of sales, service and marketing.
Those 1,100 dealers make up about 20 percent of GM?s dealer network, but produce only 7 percent of its sales, he said.
More than 400 of those dealerships were selling less than 35 units a year, said LaNeve.
It is uncertain how many Houston-area GM dealers were notified that their franchise contract would not be renewed.
GM did not circulate its list of dealer closings and allowed terminated dealers to keep the news to themselves.
Under rules of liquidation, Chrysler was compulsory to go public with the names of its closing dealers.
Along with the termination of 1,100 underperforming dealership contracts, GM said it would remove about 500 outlets that sell only Pontiac, Saturn, Hummer and/or Saab, brands that will be sold or phased out