GM will reduce its dealer network from 5,969 dealerships to 3,600 by 2010, starting with 1,100 dealerships receiving a not-so-golden-ticket today. Losing jobs sucks, but it just makes GM sorta like Starbucks.
GM issued a statement moments ago confirming what's already been noted in their recent S-4 filing and viability plan — the automaker plans to reduce its dealer network from 5,969 stores today to approximately 3,600 by the end of 2010. That process will start today with GM sending out contact to dealers regarding "long-term planning." Specifically, 1,100 underperforming and "very small sales volume" U.S. dealers will be advised GM doesn't see them as part of their friend network anymore. GM's Mark LaNeve says they're not "termination notices, but rather that GM won't be renewing their dealership agreements" with these crappily small dealers. Additionally, GM'll be "updating" 470 Saturn, HUMMER and Saab dealers on the "status of the brands" — meaning they should look into becoming a Schwinn dealership or something — as well as discussing how remaining dealers will support GM's retail plans going forward.
This was not only expected, but frankly, necessary. A good analogy for the automaker's dealership network would be Starbucks. Like the coffee shop, GM has so many stores you were tripping over them everywhere you went. Some cities even had two of them across the street from each other. That type of customer-poaching system no longer works when you're an automaker that has to deal with over-bloating under-sold inventory at two dealerships. It's so much easier to do it with one.
Thanks to GM not owning their dealerships because of the patchwork of state franchise laws, the analogy's a little imperfect. But, hey, at least GM's building a product that's more reliable than the barrista at our local 'bucks has been lately. Oh, and also, cars cost a lot more than coffee.