MONROE - The United Auto Workers union agreement Thursday on a tentative deal with the government and General Motors Corporation is not going to have much effect on dealership consolidation discussions, but local dealerships still are not immune to closures.
Bill Ruda, of Ruda Chevrolet-Toyota-Scion in Monroe, said he still is uncertain whether the consolidations will be forced.
General Motors still has about 4,900 dealerships, and wants to get that number down to 3,600 to 4,000, Ruda said.
About 500 Saturn stores will be closed, leaving 400 to 500 dealerships to consolidate.
"Things are changing so fast," Ruda said. "If you watch the media, it looks like GM is going to file (bankruptcy)."
Tom Wilkenson, GM director of news relations, told The Monroe Times on Thursday the pending bankruptcy and consolidation are unrelated.
"Consolidations are being driven by a reduction in sales and size of the market," he said.
Nationwide, 1,100 dealers were notified of franchise non-renewals on May 15. No Green County dealers received a non-renewal notice. Franchise renewals were to come due in October 2010.
Consolidation deals will be worked out in discussions through June, Wilkenson said.
"From here on out, we will be working with all the dealers to strengthen the stronger ones and help those who want to exit, to put the retail into a much stronger position," he said.
General Motors has received $15.4 billion in government loans and faces a June 1 government-imposed deadline to complete its restructuring or head into Chapter 11 bankruptcy reorganization.
The UAW's agreement would cut labor costs, close factories and change the way a union-run trust for retiree health care is funded.
The move is a key step toward GM's efforts to restructure outside of bankruptcy court.
But, analysts have said it is nearly impossible that the required 90 percent of bondholders of unsecured debt will agree to accept equity in the company in place of the $27 billion they are owed.
General Motors has said bankruptcy is possible if it fails to persuade bondholders to swap $27 billion in bond debt for stock.
The Obama administration welcomed the UAW agreement, saying it is a positive development in GM's "effort to restructure and become a strong, viable company going forward," an administration official said.
General Motors would not comment.
The UAW statement made no mention of factory closures or production of vehicles outside the U.S., items that the union has protested in Detroit and Washington as the deadline approaches.
The union announced its deal in a short statement Thursday, but the details were withheld pending meetings with members to explain the terms. Union members still have to vote on their deal, and plant-level union officials have been summoned to Detroit on Tuesday to hear details.
General Motors plans to close 16 factories, costing 21,000 hourly workers their jobs, as it tries to cut labor costs and shrink its manufacturing footprint to match lower demand for its products. Of the 16, two have been announced previously, an engine plant in Massena, N.Y., and a stamping plant in suburban Grand Rapids, Mich.
The company has about 61,000 hourly workers in the U.S. but plans to take that number down to 40,000 by 2010.
- The Associated Press contributed to the report
Bill Ruda, of Ruda Chevrolet-Toyota-Scion in Monroe, said he still is uncertain whether the consolidations will be forced.
General Motors still has about 4,900 dealerships, and wants to get that number down to 3,600 to 4,000, Ruda said.
About 500 Saturn stores will be closed, leaving 400 to 500 dealerships to consolidate.
"Things are changing so fast," Ruda said. "If you watch the media, it looks like GM is going to file (bankruptcy)."
Tom Wilkenson, GM director of news relations, told The Monroe Times on Thursday the pending bankruptcy and consolidation are unrelated.
"Consolidations are being driven by a reduction in sales and size of the market," he said.
Nationwide, 1,100 dealers were notified of franchise non-renewals on May 15. No Green County dealers received a non-renewal notice. Franchise renewals were to come due in October 2010.
Consolidation deals will be worked out in discussions through June, Wilkenson said.
"From here on out, we will be working with all the dealers to strengthen the stronger ones and help those who want to exit, to put the retail into a much stronger position," he said.
General Motors has received $15.4 billion in government loans and faces a June 1 government-imposed deadline to complete its restructuring or head into Chapter 11 bankruptcy reorganization.
The UAW's agreement would cut labor costs, close factories and change the way a union-run trust for retiree health care is funded.
The move is a key step toward GM's efforts to restructure outside of bankruptcy court.
But, analysts have said it is nearly impossible that the required 90 percent of bondholders of unsecured debt will agree to accept equity in the company in place of the $27 billion they are owed.
General Motors has said bankruptcy is possible if it fails to persuade bondholders to swap $27 billion in bond debt for stock.
The Obama administration welcomed the UAW agreement, saying it is a positive development in GM's "effort to restructure and become a strong, viable company going forward," an administration official said.
General Motors would not comment.
The UAW statement made no mention of factory closures or production of vehicles outside the U.S., items that the union has protested in Detroit and Washington as the deadline approaches.
The union announced its deal in a short statement Thursday, but the details were withheld pending meetings with members to explain the terms. Union members still have to vote on their deal, and plant-level union officials have been summoned to Detroit on Tuesday to hear details.
General Motors plans to close 16 factories, costing 21,000 hourly workers their jobs, as it tries to cut labor costs and shrink its manufacturing footprint to match lower demand for its products. Of the 16, two have been announced previously, an engine plant in Massena, N.Y., and a stamping plant in suburban Grand Rapids, Mich.
The company has about 61,000 hourly workers in the U.S. but plans to take that number down to 40,000 by 2010.
- The Associated Press contributed to the report