GM reaches agreement with dealers

David Shepardson / Detroit News Washington Bureau

General Motors Corp. reached a deal with the National Automobile Dealers Association on franchise terms for the more than 3,500 dealers it plans to keep after it exits bankruptcy, GM and NADA said Monday night.

John McEleney, chairman of NADA, complained last week in Senate testimony of "onerous one-sided" agreements that will leave dealers with few legal rights. They must sign by June 12 or GM can cancel their agreements.

NADA met with GM's Troy Clarke on Friday to discuss their concerns. Late Monday, NADA issued a statement saying it "supports GM's amendments to the Participation Letter Agreement."

"I especially commend GM for its flexibility and its willingness to make substantive clarifications and modifications to address dealer concerns. We believe GM has made a very good faith effort, given the unprecedented circumstances facing GM and the industry," McEleney said. NADA said it "addresses the majority of dealer concerns."

GM wants to close between 2,400 and 2,700 of its dealerships.

Mark LaNeve, GM's vice president for North America sales, service and marketing, said "after meetings last Friday and Saturday with both NADA and GM's National Dealer Council (NDC) leadership, we now have a better collective understanding of the issues. As a result, GM will be sending our dealers a letter clarifying various subjects in the Participation Agreement.

"To date, we are very pleased with the overall dealer response to the proposed agreements," he said. "More than 80 percent of GM dealers have signed or verbally agreed to the participation agreements, while nearly 70 percent have done so with the wind-down agreements. In both cases, we expect to have at least 95 percent of the signed documents on hand ahead of our Friday, June 12, deadline.

"While these efforts are extremely difficult for all involved, we believe that the GM dealers moving forward with the company strongly support actions to improve their long-term competitiveness and business opportunities."

On Friday, a House committee will take up the issue of GM and Chrysler's dealership closures. Among those testifying will by GM's President and CEO Fritz Henderson.