GM Distress: Dealers Not Reinstated Face Uncertain Future, Heartache

March 11, 2010 — -- The General Motors dealership on the corner of Main and Washington streets in Weymouth, Mass., is a family business.

Richard "Ricky" Smith opened the franchise in 1959. His son, Rick Smith, began working the lot in his college days and took over the dealership in 1985. Most recently, Rick Smith's own two sons, Aaron and Derek, joined their dad on the job.

Now the Smith family's 51-year history with GM may be coming to a close, as the struggling American auto giant begins to bid good-bye to hundreds of dealerships.

"There's been a lot of uncertainty, emotional distress and I can say that I am disappointed ... definitely disappointed," Smith said.

Smith is one of the 1,160 dealers who signed on for arbitration last year after GM announced in May 2009 that it would cut ties with about 2,000 underperforming dealerships nationwide. The automaker announced last week that of the dealerships that filed claims, it could reinstate up to 661.

The decision is "good for our customers, our dealers and GM," GM North America president Mark Reuss said in a statement last week. But lost in the happy news was the fact that hundreds of dealerships still face closure.

That apparently includes Smith.

"I didn't get a call saying I was reinstated. I received a letter, but I'm not exactly sure what it means," said Smith, who described the letter as a request by GM to sit down and have discussions.

"The letter is confusing. I assume the discussions are about us dropping the arbitration and taking a settlement or maybe it's about us possibly remaining a dealer. I don't really know," he said. "…They want discussions 'mano a mano' I guess."

A GM spokesman said dealers like Smith are still slated to lose their franchises in October, but the letter he received offers the potential of a settlement.

"If they're interested in settling they can contact our counsel and we can have a discussion with them or we can go … to arbitrate," he said.