GM to Notify 1,100 Dealers of Closings, Chrysler Has Already Informed 789 Dealerships

GM today began informing 1,100 General Motors dealerships that the company will not renew their franchise agreements when they expire at the end of September 2010.

The news comes a day after Chrysler announced that it would sever relationships with 789 dealers, in an effort to cut costs and keep existing dealers from competing with one another.

At Chicago's oldest dealership -- selling cars since before Chrysler existed -- owner Stanley Balzekas summoned his employees Thursday.

"They do not want us to be a Chrysler dealer anymore," Balzekas said. "It's very hard for me. The time has come."

Click here to see the full list of Chrysler dealers closing

The word arrived by parcel post, in cold corporate language that left his daughter Carole feeling betrayed.

"This type of letter is just a shame to send to somebody who has been in business for 90 years," she said.

It was the same sad scene at hundreds of other dealers across the country Thursday.

"My franchise was basically stolen from me, and it's gonna be given to a dealer down the street for free," said James Anderer, owner of Island Jeep Lindenhurst, N.Y. "I have 48 people here who are going to be unemployed."

"We didn't do anything wrong, but we're being punished," Anderer added. "Chrysler won't even take the cars back. So the 100 cars I have in inventory I have to retail out of them in the next couple of weeks, either throw them in a Dumpster or sell them for pennies on the dollar. … Chrysler got a bailout. I'm not asking for a bailout. I don't need a bailout. I run my business properly."

Bob Kaplan, of Dominion Dodge in Salem, Va., said: "You don't know what to feel. You feel like you put your life and soul into this and done it the best you can and worked as hard as you can, represented the brand very well."

The closing of the dealerships will be noticed in the communities they serve, especially the ones in small towns.

"The dealers are the biggest tax collectors, sales tax collectors, for communities. The dealers are some of the biggest charitable contributors of a community," said Pat Primm of the Akron Auto Dealers Association.

Chrysler and General Motors want to consolidate a vast network of dealerships left over from a bygone era, focusing instead on fewer and bigger dealers.

"Fewer, more profitable, dealerships is better than having thousands of smaller less profitable dealerships," said auto analyst John Casesa.

GM and Chrylser Dealers in Small Towns

Some of those smaller dealers play significant roles in their communities and losing them will leave big holes.

Bob Maguire owns a GM dealership Bordentown, N.J. He doesn't expect to have to close, but if he got such orders, he would "probably cry and then regroup and sit down with my wife and son and determine what corrective actions we can take to overtake this."

"I am not going to give up. I have made my life's work here," he said.

Maguire gives money to the local high school prom and sits on the board of directors of the local Marine Corps scholarship fund.

"When you eliminate 1,100 dealers in America, what you are actually doing is taking their entire work force and putting them out of work," he said. "I mean, there goes the mortgage payment. There goes the payment on the college education. There goes a family that is now at risk, looking for an income."

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