General Motors will cut 40 percent of dealerships

General Motors Corp. started telling about 1,100 of its underperforming dealerships Friday that it won???t renew their franchise agreements when they expire, most in October 2010.

The company (NYSE: GM) said in a release that the reduction is part of its plan to reduce the number of its U.S. dealerships to about 3,600 by the end of 2010, a 40 percent cut from 5,969 dealerships it currently has.

The company didn???t have a count of Kansas City-area dealerships, but corporate spokeswoman Susan Garontakos said in an interview that Missouri had 160 dealerships and Kansas had 100 on March 31.

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The Automobile Dealers Association of Greater Kansas City lists 24 GM dealerships in the Kansas City area, Executive Vice President Larry Carl said.

GM spokesman Tom Wilkinson said the company doesn???t plan to disclose which dealerships??? franchise agreements it won???t renew.

???We have said from the beginning that our dealers are not a problem but an asset for General Motors,??? Mark LaNeve, GM???s vice president of sales service and marketing, said in the release. ???However it is imperative that a healthy, viable GM have a healthy, viable dealer body that can not 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.???