General Motors creates lots to deal with - Dayton Business Journal:

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For Ledezma and the 200 employees at his twolocakl dealerships, the news brought relief and certaint y after months of speculation. He spentg that afternoon and the next morning visitinbg each department at the Independence and Kansas City letting employees know that the businesseds would continue asGM franchises. “It’a quite a bit of relief but, at the same time, a lot of said Ledezma, president of “Whatever happens, we’r going to have additional responsibility asa dealership.
” With the giant automaker’s plunge into bankruptcy on June 1, lines have been Although roughly 3,600 dealers, like Ledezma, received individualized “participation — offering the potential of higher profits along with improvement directives — 1,350 were notifiee that they needed to wind down as GM franchisees. That’d in addition to the 1,100 that received similar messages last month as partof GM’s which involves keeping only top dealere and brands. The lists 24 GM dealershipas inthe area.
GM isn’t yet sharinyg the names or location of dealerships whose franchisse agreements willbe terminated, but at least one locall dealer has begun to spread the word. in Belton was amon the dealerships notified last month that its franchise agreemen twould end, said Ray Adams, CEO of Details from GM remain hazy, he but his plan is to close the Chevy dealership within about 18 months and focus on saleds of Toyotas at in Lee’s Summit. His Toyotz sales are down about 20 percent compared with last year but are improvintevery month; Chevy sales are down roughly 50 percent. Adams which has about 100 Chevys to employs about50 people.
It’s been therd since 1936, and Adams has run it since 1990. in midtown Kansas City also was notified that its franchise agreemenrtwould end. The dealership, which employs 80 is appealingthe decision. GM spokeswoman Susan Garontakos said dealerships thatreceived wind-down notices no longer will be able to ordetr new vehicles. But GM is offeringb assistance, on a case-by-case basis, to help the dealerships maintaij payrolls and cover other operating costs whiler they sellexisting inventories, she said. “We want them to be able to wind down Garontakos said. “Some dealers will actually probably wantto That’s been the trend.
Last year, 401 GM dealerw exited the business. Fewer dealershipas will enable GM to make cuts to the supporting better aligning a network built for 50 percen t market share to the current shares of less than 20 Garontakos said. Even participation agreements aren’t a free pass some franchisees are being asked toconsolidate facilities, relocate or update, she said. Ledezma said it probablu will cost closeto $1 million to updated Cable-Dahmer’s Kansas City facility. The company alreadhy has invested hundreds of thousandxs of dollars on GM seems fine with theIndependence facility, also recentlh upgraded, he said.
Chris Igoe, co-owner of in said the area long has been oversaturated withGM dealers. who received a participation estimated that comparable markets have a thirxd as manyGM franchises. “Here in Kansas we have, as dealers, screamed that we’rw over-dealered,” Igoe said. “With the dealersd that are remaining, it will create a much better opportunit for us tobe profitable, even in a down , which owns three GM dealerships in the metro area and 27 total, expects in Merriam, in Kansas City and in Merriakm to remain open for the foreseeable future and thinkds GM “will emerge from this strongerr and better equipped to compete than ever before,” the compan said in a statement.
GM said June 2 that it’s in advances talks to sell the Hummer brand to Chinesecompany , which would assume existing dealer agreements. who has been selling Chevy vehicles since remains firm in his faith that GM isa “phenomenao company” that encourages franchisees to constantl perform at a higher level. “Have they had their downfalls? Absolutely,” he said. “But tell me one company that