GM Canada confirms about 245 dealers getting termination notices

TORONTO — General Motors of Canada has told about two in every five of its dealers that their relationships with the automaker will end by October 2010.

A showroom at a GM dealership in North Vancouver is shown Wednesday. General Motors of Canada has told about two in every five of its dealers that their relationships with the automaker will end by October 2010.

TORONTO — General Motors of Canada has told about two in every five of its dealers that their relationships with the automaker will end by October 2010.

Many are expected to close this year, in a retail pullback affecting as many as 10,000 jobs.

GM sent emails Wednesday to about 245 of its 709 Canadian dealerships, and ongoing consolidation is expected to increase the number of shuttered locations further by the end of 2010.

Spokesman Stew Low said the automaker would not publicly identify dealers facing the axe, but he said they are primarily in large cities.

GM has five-year sales and service agreements with its dealers which all expire in October 2010, but “a good portion of the dealers will be wound up by the end of this year,” Low said.

“This all comes down to individual conversations with dealers, because each situation is unique.”

General Motors (NYSE:GM) stated that the “rationalization” is focused on key urban markets, and it aims to accomplish the reduction “in an orderly, cost-effective and customer-friendly way.”

The announcement — following its termination notifications last week to 1,100 U.S. dealers — came as the automaker continued talks to extract further concessions from its Canadian unionized workforce.

The main dealership cuts are in the metropolitan areas of Toronto, Montreal and Vancouver and in other large cities.

“There will be some rationalization in smaller communities as well,” based on “retailing fundamentals,” Low said.

“You look at where the dealer’s located, you look at the age of the facility, you look at whether that community is growing or not.”

GM stated that the cull will give it “a more competitive dealer network with higher volumes, while continuing to maintain the strongest and broadest dealer network in the country.”

While General Motors of Canada has cut its direct workforce to 12,000 people, the dealer chain is estimated to employ 33,000.

“The economic implications, of course, are huge,” said Michael Hatch, chief economist at the Canadian Automobile Dealers Association, who estimated 10,000 jobs could disappear.

“People look at the auto sector, sometimes, and they think it’s just Detroit and Oshawa and Windsor, but dealerships are the retail presence.”

However, Hatch noted that GM’s action is focused on urban centres.

“They’re going to maintain their national presence,” he said.

“It’s a lot easier to serve the population of a big city having eliminated a few than it would be in rural areas, where if you eliminate a dealership that’s the only one within a four-hour radius you’re compromising your competitiveness,” he added.

“In urban centres, in the GTA for sure, there’s room for some consolidation.”

The Canadian Auto Workers, meanwhile, said negotiations with GM Canada were continuing with no indication of when or how they might conclude.

The union had said Tuesday that the “incredibly intense” talks were “approaching a moment of truth.”

Just Posted

Men posing as repo men attempt to steal vehicle in Red Deer County

Two men attempted to steal a utility vehicle from a Red Deer… Continue reading

Red Deerian spreads kindness with one card at a time

One Red Deerian wants to combat bullying by spreading kindness in the… Continue reading

Bowden baby in need of surgery

“Help for Alexis” Go Fund Me account

PHOTO: First Rider bus safety in Red Deer

Central Alberta students learned bus safety in the Notre Dame High School… Continue reading

WATCH: Annual Family Picnic at Central Spray and Play

Blue Grass Sod Farms Ltd. held the Annual Family Picnic at the… Continue reading

Woman has finger ripped off at West Edmonton Mall waterslide

SASKATOON — A Saskatchewan woman says she lost a finger after her… Continue reading

Uncertainty looms over Canada’s cannabis tourism, but ambitions are high

TORONTO — Longtime marijuana advocate Neev Tapiero is ready for the cannabis-driven… Continue reading

Feds mulling safeguards to prevent ‘surge’ of cheap steel imports into Canada

OTTAWA — The federal government extended an olive branch of sorts to… Continue reading

Ontario govt caps off summer session by passing bill to cut Toronto council size

TORONTO — The Ontario government passed a controversial bill to slash the… Continue reading

Updated:Italian bridge collapse sends cars plunging, killing 26

MILAN — A 51-year-old highway bridge in the Italian port city of… Continue reading

Saudi Arabia spat affecting Canadians embarking on hajj, community members say

TORONTO — Members of Canada’s Muslim community say recent tensions between Ottawa… Continue reading

Tug carrying up to 22,000 litres of fuel capsizes in Fraser River off Vancouver

VANCOUVER — The smell of diesel filled the air as crews worked… Continue reading

Nebraska executes first inmate using fentanyl

LINCOLN, Neb. — Nebraska carried out its first execution in more than… Continue reading

Most Read

Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month