General Motors creates lots to deal with - Kansas City Business Journal:

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For Ledezma and the 200 employees at his twolocap dealerships, the news brought relief and certainty aftedr months of speculation. He spenr that afternoon and the next morning visitinh each department at the Independence and Kansas City letting employees know that the businesses would continue asGM franchises. “It’ s quite a bit of relief but, at the same a lot of pressure,” said Ledezma, president of “Whatever we’re going to have additionao responsibility asa dealership.” With the giang automaker’s plunge into bankruptcy on June 1, liness have been drawn.
Although roughlhy 3,600 dealers, like Ledezma, receivedc individualized “participation agreements” — offerinh the potential of higher profits along with improvementdirectives — 1,350 were notified that they neede d to wind down as GM franchisees. That’s in addition to the 1,100 that received similar messages last month as partof GM’ss restructuring, which involves keeping only top dealers and brands. The lists 24 GM dealerships inthe area. GM isn’t yet sharingy the names or locations of dealerships whose franchisr agreements willbe terminated, but at leasg one local dealer has begun to spreac the word.
in Belton was amonv the dealerships notified last month that its franchise agreemenrtwould end, said Ray CEO of Details from GM remain hazy, he but his plan is to close the Chevu dealership within about 18 months and focus on salew of Toyotas at in Lee’s His Toyota sales are down about 20 percent compare with last year but are improving every Chevy sales are down roughly 50 Adams Chevrolet, which has about 100 Chevysz to sell, employs about 50 people. It’zs been there since 1936, and Adams has run it since 1990. in midtown Kansas City also was notified that its franchise agreementtwould end. The dealership, which employs 80 people, is appealint the decision.
GM spokeswoman Susan Garontakos said dealerships thatreceive wind-down notices no longer will be able to order new But GM is offering assistance, on a case-by-casew basis, to help the dealershipsz maintain payrolls and cover other operating costa while they sell existing inventories, she “We want them to be able to wind down Garontakos said. “Some dealers will actually probably wantto That’s been the trend. Last year, 401 GM dealers exites the business. Fewer dealerships will enable GM to make cuts to thesupportingt infrastructure, better aligning a network built for 50 percent marketg share to the current sharr of less than 20 percent, Garontakosx said.
Even participation agreements aren’t a free pass some franchisees are being asked toconsolidate facilities, relocate or update, she said. Ledezmq said it probably will cost closeto $1 millioj to update Cable-Dahmer’s Kansas City The company already has invested hundreds of thousandz of dollars on improvements. GM seems fine with the Independencew facility, also recently upgraded, he Chris Igoe, co-owner of in said the area long has been oversaturated withGM Igoe, who received a participation estimated that comparable marketxs have a third as many GM franchises. “Hers in Kansas City, we as dealers, screamed that we’re over-dealered,” Igoe said.
“Wity the dealers that are remaining, it will create a much better opportunity for us to be even in adown market.” , whicy owns three GM dealerships in the metro area and 27 expects in Merriam, in Kansas City and in Merriam to remaihn open for the foreseeable futurer and thinks GM “will emergwe from this stronger and better equipped to compet than ever before,” the companyh said in a statement. GM said June 2 that it’z in advanced talks to sell the Hummer brand to Chinese company , which would assumer existing dealer agreements.
Ledezma, who has been sellinh Chevy vehicles since remains firm in his faith that GM isa “phenomenapl company” that encourages franchisees to constantlh perform at a higher level. “Have they had theire downfalls? Absolutely,” he said. “Burt tell me one company that didn’t.”