GM to eliminate 1,100 U.S. dealers

NEW YORK — General Motors on Friday told about 1,100 of its dealers — one in five — that they would be dropped by late next year, adding to the economic pain radiating from the beleaguered Detroit automakers to cities and towns across the country.

Including Chrysler's decision a day earlier to eliminate a quarter of its own, about 1,900 dealerships — many pillars of their communities and heavy advertisers for local media — learned in a matter of 48 hours that they would be forced either to sell fewer brands or close altogether.

The GM dealerships will be eliminated when their contracts end late next year.

In Utah, GM dealers described being nervous about their future. The Deseret News contacted 15 GM dealerships from Cedar City to Vernal and Brigham City. Several did not return messages.

FedEx letters bearing the bad news began arriving Friday morning at GM franchises around the country. The letter states that dealers had been judged on sales, customer service scores, location, condition of facilities and other criteria.

On Friday, a missive bearing bad news was delivered to Fred Barber, the manager of Barber Brothers Motor Co. Inc. in Spanish Fork.

"When the economy slumped we had to cut our staff from 71 employees to 37," Barber said. "Now we'll probably have to dump another half because of this."

For the past 20 years, Barber has been a dealer for GM. He's also dealt for Chrysler for 26 years. Both companies have nixed Barber as a dealer. Barber questioned GM's reasoning for the cuts, saying his business has maintained strong capital and is continually rated in the top 5 for customer service in the Mountain West.

"This is going to affect Spanish Fork and our community," Barber said. "We brought in revenue and contributed that back to the town. This is just devastating."

Barber also sells for Mitsubishi and some tractor companies, and he said he will probably continue operating as a used car lot.

Russ Perry has owned Perry Motor Co. in Vernal for 50 years. He said Friday afternoon that he did not receive a letter. "And I still don't know what that means, you know?" he said. "It might mean we're good for one more day."