1,100 GM dealers get ???wind down??? letters

Struggling General Motors Corp. has notified about 1,100 of its roughly 6,000 dealerships that they will be terminated by late next year.

Letters encouraging dealers to ???wind down??? their businesses were sent Thursday and were to be received by the dealers Friday.

The move is part of GM???s plans to restructure its operations in an effort to become profitable again in the wake of the economic downturn and declining sales.

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In a statement, GM said about 1,100 ???underperforming and very small sales volume U.S. dealers will be advised that GM does not see them as part of its dealer network on a long-term basis. In most cases, existing franchise agreements run through October of 2010.

???GM???s viability plan calls for fewer, stronger brands as well as fewer, stronger dealers. We have taken a very difficult step by identifying those dealerships we???d like to keep in the GM dealer network and those with whom we will have to wind down our business relationships.???

In a conference call to reporters Friday, GM said it would not disclose publicly which dealerships got letters, leaving it up to the dealers themselves to decide whether to disclose that information.

Dick Swope, president and CEO of the Sam Swope Auto Group in Louisville, said his dealership hadn???t gotten a letter, and he noted that business ???was good. We had an excellent first quarter, and the second quarter started out the same way.???

He added that profits are up from last year, and that he???s cautiously optimistic for the rest of this year.

GM???s auto lines include Chevrolet, Pontiac, Buick, GMC, Cadillac, Saturn and Hummer.

On Thursday, Chrysler Corp. revealed a list of 789 dealerships that it plans to drop, including three in the Louisville area: Neil Huffman Dodge, 4136 Shelbyville Road; Neil Huffman Chrysler-Jeep, 4126 Shelbyville Road; and Coyle Dodge Inc., 513 E. Spring St. in New Albany.

GM has said that it eventually plans to drop 2,600 or more dealerships by 2010, and that it hopes that several hundred dealers will agree to close voluntarily.

In the conference call, Mark LaNeve, GM???s North America vice president of vehicle sales, service and marketing, said dealers making the list were ???below average performers??? and are in danger of going out of business anyway.

He said the dealerships notified are 18 percent of the total network, but account for 7 percent of sales.

Between 400 and 500 of the dealers notified sold fewer than 35 units per year, he said, while the rest of the dealers did not meet the company???s performance standards, which are a calculation of several factors including sales, profitability and working capital compared with their peers.