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General Motors discontinued its contracts with 18% of its 6,200 dealerships. CBS' Dean Reynolds pointed out that they were the small fry: "The affected dealers accounted for only 7% of GM's sales last year. Indeed 500 of them averaged just 35 sales a year." ABC's Chris Bury expects GM to shed a further 1,200 dealerships when it cuts its four smallest brands: Saturn, Saab, Pontiac and Hummer. "GM wants a dealer network more like Toyota's: for example, Chevrolet and Toyota sell about the same number of cars in this country but Chevrolet has three times as many dealerships. Only the biggest, most profitable ones will survive."
The ax fell at the still-viable General Motors more gently than at the already-bankrupt Chrysler. "Unlike those cut at Chrysler, the GM dealers have 30 days to appeal," ABC's Bury told us. "Unlike Chrysler, GM says it will buy the unsold cars back," noted NBC's Lee Cowan. "Unlike Chrysler," CBS' Reynolds reported, "GM will give its jettisoned dealers a wind-down period to stay open, until the fall of next year."
Even though the 1,100 dealerships may be small, they still employ 63,000 workers, NBC's Cowan told us. CBS had Nancy Cordes catalogue the further ripple effect, from the local vendors--cleaning, towing, tire suppliers and so on--who will no longer have customers…to the community activities that will lose their sponsors…to the municipalities that will lose real estate and sales tax revenues. Maryland dealer Tammy Darvish told Cordes that "nobody wins--not the automaker, not her workers and certainly not the neighborhood."
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