GM to Close 1,100 Dealerships
By Kevin Spak,  Newser Staff
Posted May 15, 2009 9:20 AM CDT
The company bowtie logo shines off the girlle of an unsold 2008 Silverado pickup truck at a Chevrolet dealership in Denver on Sunday, Sept. 7, 2008.   (AP Photo/David Zalubowski)
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(Newser) – GM has sent termination notices to 1,100 of its 6,000 US dealerships as part of its plan to eventually shutter 42% of its retail network, CNN reports. The dealers have been notified that their contracts won't be extended next October, and some will shutter this year, a GM spokesman said. The dying dealerships hold about 120,000 GM vehicles, total value $2.5 billion, and won’t close until they’ve exhausted their inventories.

GM is hoping that by reducing competition between its dealers, it can raise prices and increase sales at each remaining outlet, shrinking margins and boosting profits. It's told the Obama administration it plans to cut all but 3,600 dealerships. Many of the remaining cuts will be dealers trading exclusively in the Saturn, Saab, Hummer and Pontiac brands GM intends to put to pasture.