DETROIT - Up to 20 General Motors Corp. dealerships have been spared the death penalty after the company reviewed their cases and reversed plans to end their franchise agreements, a top GM executive said yesterday.
Mark LaNeve, GM's North American vice president for sales and marketing, said in an interview with the Associated Press that about 500 dealers had appealed the company's decision to eliminate them, with 15 to 20 of those appeals granted.
GM also announced yesterday that a former chief executive and chairman of telecommunications giant AT&T Inc. will lead General Motors Corp.'s board after the automaker emerges from bankruptcy protection.
Some of the dealer closures were upheld by a panel of GM officials, while others are still being evaluated, LaNeve said. The dealerships were not identified.
Last month, GM announced it would not renew the franchise agreements of 1,100 underperforming dealerships nationwide by next fall. GM said its 6,000-dealer network is antiquated with many dealers competing with each other in close proximity, driving down prices. Many are losing money, can't afford to advertise much, and their facilities are inferior to GM's competitors, the company said.
Dealers were judged on whether they met sales goals, customer-service scores, the condition of their buildings and other criteria.
But LaNeve said in some cases, GM made mistakes, which is possible when dealing with so many dealers.
"If we made a mistake on a performance metric, or there were extraordinary circumstances causing that performance, in fairness to the process, we wanted the opportunity to reverse that decision," he said.
GM, which has received $20 billion in government loans, is scrambling to restructure under Chapter 11 bankruptcy protection. Crosstown rival Chrysler LLC made a similar decision to eliminate 789 dealer franchises, and a New York bankruptcy court judge allowed the decision yesterday.
GM said Edward Whitacre Jr., 67, eventually will replace Kent Kresa, who will remain GM's interim chairman until the reorganized automaker emerges as a new company that's majority-owned by the U.S. government.
Whitacre was chairman and chief executive of AT&T and its predecessor companies from 1990 to 2007.