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Factors Affecting the Decisions of General Motors and Chrysler to Reduce Their Dealership Networks
For the U.S. auto industry, the quarter ending June 30, 2009, was dominated by the bankruptcy filings of Chrysler and GM. As part of the bankruptcy proceedings, Chrysler terminated 789 dealerships, and GM planned to wind down 1,454 dealerships by Oct. 2010. Questions arose as to how GM and Chrysler selected dealerships for termination and what benefit, if any, the co’s. gained from terminating the dealership. This report addresses: (1) the role of U.S. Treasury in the decision to reduce dealership networks; (2) the extent to which GM and Chrysler documented processes for deciding which dealerships to terminate and which to retain; and (3) to what extent the dealership reductions are expected to lead to cost savings for GM and Chrysler. Illus.
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