GM Suing Underperforming Dealerships

GM Suing Underperforming Dealerships

A swath of GM dealers chose to bet the farm in the hope of keeping their franchises amid the automaker’s massive 2009 restructuring, but that decision is turning out to be a bad one for at least eight locations.

For a select number of dealers, GM outlined a series of individual targets that the stores would have to meet, including sales figures. General Motors is now suing those that failed to meet the target agreed upon between the automaker and individual franchises. During the brand’s restructuring, it targeted 2,064 dealerships for closure, but 700 of those filed for arbitration, 120 of which were granted a probationary franchise reinstatement.

The majority did fine, but a few unfortunate lots didn’t make the cut. Now, GM is exercising its option to buy their assets and has filed federal lawsuits against them, saying they failed to meet previous objectives.

But the story isn’t necessarily as simple as ousting poor performers. In at least one case, a dealership is arguing that it wasn’t provided with inventory to meet its agreed targets.

Astro @ Exit 132 Buick-GMC, Whitehall, W.Va. is arguing that it wasn’t given enough of, or the right mix of vehicles to meet GM’s sales demand. Now, it’s disputing the company’s claim to its assets, saying the brand didn’t hold up its end of the bargain.

[Source: Automotive News]