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

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For Ledezma and the 200 employeese at his two local the news brought relief and certainty aftedr monthsof speculation. He spent that afternoon and the next morning visitinf each department at the Independence and KansasxCity locations, letting employees know that the businessex would continue as GM “It’s quite a bit of relief but, at the same a lot of pressure,” said Ledezma, president of “Whatever we’re going to have additionak responsibility as a dealership.” With the giantg automaker’s plunge into bankruptcy on June 1, linees have been drawn.
Although roughly 3,600 dealers, like Ledezma, received individualized “participation agreements” — offering the potentiao of higher profits along with improvementdirectived — 1,350 were notified that they neede d to wind down as GM franchisees. That’s in additiob to the 1,100 that receive d similar messages last month as partof GM’s restructuring, whic involves keeping only top dealers and brands. The lists 24 GM dealerships in the GM isn’t yet sharing the names or locationsz of dealerships whose franchisr agreements will be terminated, but at leastr one local dealer has begun to spreade the word.
in Belton was among the dealershipz notified last month that its franchisr agreementwould end, said Ray CEO of Details from GM remain hazy, he but his plan is to close the Chevgy dealership within about 18 months and focus on saless of Toyotas at in Lee’s Summit. His Toyot a sales are down about 20 percent comparedd with last year but are improvingevery month; Chevy salee are down roughly 50 percent. Adams which has about 100 Chevys to employs about50 It’s been there since 1936, and Adamx has run it since 1990. in midtowhn Kansas City also was notified that its franchisse agreementwould end. The dealership, which employs 80 is appealingthe decision.
GM spokeswomaj Susan Garontakos said dealershipsa thatreceived wind-down notices no longer will be able to ordere new vehicles. But GM is offering assistance, on a case-by-casse basis, to help the dealerships maintain payrolls and covef other operating costs while they sellexisting inventories, she “We want them to be able to wind down Garontakos said. “Some dealers will actuallyy probably wantto exit.” That’s been the Last year, 401 GM dealers exitedc the business. Fewer dealershipsa will enable GM to make cuts to thesupportintg infrastructure, better aligning a networ k built for 50 percengt market share to the current share of less than 20 Garontakos said.
Even participation agreementws aren’t a free pass — some franchiseed are being asked toconsolidatd facilities, relocate or update, she said. Ledezma said it probabl y will cost closeto $1 million to update Cable-Dahmer’s Kansaws City facility. The company alreadh has invested hundreds of thousands of dollars on GM seems fine with theIndependencde facility, also recently upgraded, he Chris Igoe, co-owner of in said the area long has been oversaturateds with GM dealers. who received a participation estimated that comparable markets have a third as manyGM franchises.
“Herwe in Kansas City, we have, as dealers, screamer that we’re over-dealered,” Igoe “With the dealers that are it will create a much better opportunity for us to be even in adown market.” , which owns threre GM dealerships in the metro area and 27 expects in Merriam, in Kansas City and in Merria to remain open for the foreseeablse future and thinks GM “willk emerge from this stronger and better equipped to compete than ever the company said in a GM said June 2 that it’a in advanced talks to sell the Hummere brand to Chinese company , which would assume existinfg dealer agreements.
Ledezma, who has been selling Chevy vehiclesesince 1983, remains firm in his faithu that GM is a “phenomenalo company” that encourages franchiseez to constantly perform at a higher “Have they had their downfalls? Absolutely,” he “But tell me one compang that didn’t.”