GM to force up to 1,200 dealers to close, plans to sell Saturn this year

DETROIT -- GM told the dealers about the plan in a video conference, according to a dealer who spoke on condition of anonymity because the video conference was private. It is part of the company's plan announced Monday to cut more than 2,600 dealers by 2010.

GM's Saturn brand will either be sold or phased out by the end of this year, nearly two years faster than previously announced, the brand's top executive said Tuesday.

Saturn General Manager Jill Lajdziak said the brand, once billed as a different kind of car company, most likely will be sold, given the interest of several buyers who have surfaced. She says GM will take other bids for the brand until June 1.

GM has said it wants to sell or get rid of Saturn, Hummer and Saab as it restructures, so it can once again become profitable.

The company expects to lose 500 Hummer and Saturn dealers when those brands close or are sold, and it expects 400 dealers to close voluntarily. Another 500 would be consolidated into other dealerships, according to the dealer.

GM said Monday that it also would eliminate its Pontiac brand, but there are only 27 dealers that sell just Pontiacs, according to the National Automobile Dealers Association. Most Pontiac dealers also sell Buick and GMC vehicles at the same location.

Company spokeswoman Susan Garontakos confirmed the numbers and said GM is in the process of deciding which dealers to keep based on their sales performance, capitalization, potential profitability, size, image and customer satisfaction scores.

After that, she said, the company will go market by market and determine which dealerships are not meeting the terms of their franchise agreements.

"There's a lot of things that we have to consider, but we'll have talks with those dealers that show or haven't demonstrated that they have maintained a good performance," Garontakos said.