GM to close more than 1,000 dealers

Troubled car company General Motors plans to close around 1,100 of its dealerships in the United States. The company hopes the move will hold off bankruptcy.

The company is desperately looking to save money and has said it will no longer continue its relationship with a further 470 dealerships selling Saturn, Hummer and Saab vehicles. The details of these closures were given today, and this means approximately one quarter of GM's dealerships will be closed. It was only on Thursday that its competitor Chrysler announced that they planned to shut down 789 US based dealerships in a view to restructure their business. GM is also in talks with the unions to discuss a planned cut in the wages of its workers. At the moment GM has 6,246 dealerships in the United States and this number will be cut to nearer 3,605 come the end of 2009. General Motors say these plans will cut costs while critics say the franchises don't cost them any money and are needed for income. Their chief executive has spoken this week of the companies likelihood of going into bankruptcy protection and has until the start of next month to come to a deal with the US government. Mark LaNeve, the vice president of North American Sales for GM said: "It is obvious that almost all parts of GM, including the dealer body, must get smaller and more efficient," Jim Eagen from Plante and Moran said: "A concern of all dealers would be if the market value of vehicles were to decline because terminated dealers would be desperate to sell,"