• by Karl Greenberg , December 4, 2009

General Motors, whose CEO Fritz Henderson departed last week, has put forth what it is calling a comprehensive plan to give dealers whom it is asking to close operations an opportunity to air concerns and be reconsidered. The company says the program "allows [GM] to continue to move forward with a critical component of its long-term viability plan." per a company release.

The automaker has announced it would cut 400 dealers per year until 2012, reducing its dealer count from 6,375 stores to about 4,700. Several state auto dealer associations and big dealer groups are objecting to GM dismissing more than 1,000 dealerships. The plan is slated to start mid-January, assuming Congress doesn't follow through on pending legislation to block GM's plan to cut the retail roll.

Said Susan Docherty, GM's VP of U.S. sales in a release, "GM especially appreciates the leadership of Senator Durbin and House Majority Leader Hoyer and the contribution of other Congressional members. Their tireless efforts to facilitate the discussion among all parties to achieve a non-legislative resolution to address dealer concerns were critical to the development of GM's comprehensive plan."

So what is the plan? The company will go into more detail with dealers who got wind-down notices this year about the criteria behind the decision, have face-to-face reviews for dealers who haven't ended sales and service agreements, and give dealers the opportunity for binding arbitration. The arbitration will expressly be limited to whether GM selected the dealer to receive the wind-down agreement on the basis of its business criteria.

The plan also gives what GM is calling "accelerated wind-down payments" to dealers consistent with the terms of their wind-down agreements and placement assistance for service technicians and other dealership employees, among other things.

Greg Martin, director of policy and Washington communications for General Motors, says the plan is a response to talks with dealer groups and lawmakers as well as post-bankruptcy breathing room to offer some quality time with dealers asked to shutter showrooms.

"The landing is already soft if you are winding down. You have $600 million out there in terms of financial assistance for dealers, so what we are looking at here is something that we acknowledged as we were going through bankruptcy. We now have time to go back and have face-to-face meetings and walk through it with much greater depth that we couldn't do because of the speed of bankruptcy proceedings."

The company says the new plan also offers a chance for dealers who were asked to close to pitch a case for their reinstatement. "We always had an appeal process in place and 80 dealers have been reinstated already," said Martin.