General Motors has informed approximately 1100 car and truck dealers that its contracts with them will end in October 2010. Those dealers slated to continue as ongoing GM businesses were told this week they must sign a 24 page legal agreement by June 12 or their dealerships, too, would close next year.
John McEleney, chairman of the National Automobile Dealers Association objected to GM’s terms before the Senate committee Wednesdaysaying
“If I sign (the participation letter), I’ll be committing my business to spend hundreds of thousands of dollars that I know about today and committing to millions of dollars of potential financial obligations in the future. I will also be subjecting my business to sales performance standards that are not specified in the contract,” he told the committee. “Even worse, GM can alter the terms of these requirements at any time at its sole discretion. The final blow, I must waive any right of protest to any action taken by the manufacturer.”