General Motors Co. will reinstate more than half the dealerships it targeted to drop from its network.
GM executives said Friday that about 600 dealerships out of the 1,100 seeking to stay with GM will receive letters giving
them the option to remain with the automaker.
The Detroit automaker last year told 2,000 dealerships it would revoke their franchise agreements in October 2010 as part
of its restructuring. The company has said it needs to shrink the number of showrooms to keep the remaining ones healthy.
The dealerships, who say they have been treated unfairly, have been appealing the decision.
The cuts to GM's 6,000-dealer network were designed to compensate for much lower demand for cars and trucks, but some
dealers have argued that lots that are still profitable are at risk, and that the automaker hasn't offered enough details
about how it's choosing which businesses to shutter.
GM and Chrysler, which has slashed 789 dealers, have said they would reconsider the cuts. The decision was a compromise meant
to avoid federal legislation that would require that the showrooms be kept open.
Under the revised plans, dealerships would get face-to-face reviews, binding arbitration and faster payments to help dealers
slated for shutdown.
Congress-brokered talks between dealer groups and the automakers began in September. But those talks stalled over disputes
about the review process for targeted dealerships and other issues. Looming over the fight has been the threat of federal
legislation to deal with the closures. Lawmakers warned that if a deal wasn't reached, that legislation would move forward.
The White House has opposed the legislation over concerns that it could hurt GM's and Chrysler's efforts to rebound
from their government-led bankruptcies.