OK, I just sat through the 41 minute GM media conference call. It told me nothing that I didn't already know, but it certainly gave Mark LeNeve the opportunity to do some damage control in the media.
The bottom line is that GM gave 1100 dealers notice today that their sales and service agreements will not be renewed in October 2010 when the existing agreements expire. He said the intent was to communicate this with dealers today so that they and GM could enjoy an "orderly wind down" - unlike Chrysler dealers. He stated that GMAC floors the majority of the GM dealers and that if they were to terminate voluntarily, GMAC would have to buy back the inventory and that it would impair GM's cash flow and flood them with 65,000 vehicles (8% of the total of on ground inventory). He also indicated that even though dealers didn't get a letter today, another 10% will not be renewed in 2010.
LaNeve was very clear to say that this was not going to be like Chrysler's letter that went out yesterday giving Chrysler dealers 26 days to wrap up business, and to essentially fend for themselves.
That all is today.
LaNeve also said a second letter with more terms would go to the same dealers right after the first of June, which he admitted would be after GM know whether or not they will have to file for Chapter 11 Bankruptcy protection. (wink-wink)
Here's the scoop. LaNeve stated that this is going to happen whether in or out of bankruptcy court. He conceded that it might not be easy to do out of bankruptcy protection. (No kidding.) Even GM's CEO Fritz Henderson admits GM's filing is probable. If he is saying that, count on it. What this effectively does is put these 1100 dealers on notice that they have about 60 days to wrap up there GM business.
Why 60 days? Because that is about the length of time they will have before GM files for bankruptcy and when the protest period in the bankruptcy court will end (similar to June 9 for Chrysler). At that time, my guess is that the same fate that awaits Chrysler dealers will also await the dealers that received their notice. Additionally, we know that GM will no longer be bound by the sales and service agreement and that dealers - even though they may terminate BEFORE the filing - will not be able to force GM to buy back their inventory.
LaNeve repeatedly stated that they wanted a wind-down period. Perhaps that is possible IF the bankruptcy court approves it. If they don't, it is all over but the shouting. For a dealer that received a letter today to not take that to heart would in my opinion be a very serious mistake. If you haven't already called your attorney and accountant, today would be a good time to start. Additionally, if there is anything that I can do to help you in any way, please don't hesitate to call or write.