NADA Urges GM to Treat Dealers Fairly and Equitably



WASHINGTON (April 28, 2009) - The following are statements from John McEleney, chairman of the National Automobile Dealers Association, on General Motors' plan to reduce its dealer network and phase out of its Pontiac division:

“GM's decision to radically cut its dealer network over the next 18 months comes as a surprise. We understand the realities of current market conditions. But nevertheless, we feel a strong sense of disappointment that GM has, for whatever reason, decided to accelerate dealer consolidation in such a drastic way. It is imperative that GM treat all of the dealers fairly and equitably and that they be properly compensated. After all, it's not out of any fault of their own that these dealers are being forced to close their businesses.

“GM was short on details. So, there's a lot that we don't know. But we do know that this will accelerate GM's loss of revenue and market share. By closing 2,641 dealerships in 18 months instead of five years, GM could lose an estimated $35 billion in sales revenue. Another 137,330 dealership employees will lose their jobs, and state and local governments will lose an estimated $1.7 billion in sales tax revenue that would have been used for economic development in communities around the country.

“Despite these tough economic times, NADA and its dealer members will continue to work to ensure the future viability of the auto industry.”

Statement on Pontiac Phase Out:

“It's a sad day when an 80-year-old brand is eliminated. For the 2,627 Pontiac dealers, this is a day of disappointment but not total surprise. GM indicated a couple of months ago that Pontiac, at best, would be a small, niche brand. But instead GM has decided to phase out the Pontiac brand altogether by the end of 2010 as part of its updated Viability Plan. This underscores just how difficult market conditions are. NADA's main concern is that GM treats each of its Pontiac dealers fairly and equitably. The other most important concern is for Pontiac owners. Dealers have been reassured by GM that going forward, all warranties will be honored and necessary parts and service will continue to be available.”

There are 2,627 Pontiac franchises. There are 27 stand-alone Pontiac dealers. (Note: These are dealers who have no other franchises other than Pontiac.)

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