GM pulling plug on 1,100 'underperforming' dealers

DETROIT -- GM said it would not release the names of dealers being cut. "As independently owned businesses, dealer owners will make their own decisions if and when they want to make this information public," the company said.

Together with a similar announcement by bankrupt Chrysler on Thursday, almost 1,900 U.S. auto retailers have been put on notice that they are being eliminated by the two embattled automakers.

The unprecedented closures taken under the oversight of the Obama administration's autos task force puts more than 100,000 jobs at risk across the United States and shows the spreading economic pain from the restructuring of the two Detroit-based automakers.

The Treasury Department put out a statement that said in part, "As difficult as these announcements are for the dealers that will no longer be selling GM and Chrysler cars and the communities in which they operate, without the President?s intervention, the entire GM and Chrysler dealer networks could have been lost.

"By supporting a restructuring that results in stronger car companies – supported by efficient and effective dealer networks – this process will not only provide more stability and certainty for current employees but the prospect for future employment growth," the statement said.

GM said in most cases existing franchise agreements run through October 2010.

The automaker described the dealers being let go as "underperforming" and having "very small sales."

"We are telling them basically that you are not going to fit into the picture long term, but between now and then we will help wind the business down the best way individually with each dealer," GM spokesman John McDonaldsaid.

"We have said from the beginning that our dealers are not a problem, but an asset for General Motors," said Mark LaNeve, GM vice president of sales service and marketing. "However it is imperative that a healthy, viable GM have a healthy, viable dealer body that cannot only survive but prosper during cyclical downturns. It is obvious that almost all parts of GM, including the dealer body, must get smaller and more efficient."