AM Online

Big Three leaders to reduce US networks

Senior executives of the Detroit Big Three have warned that they won't be coming to rescue failing dealers in the US.

Chrysler and General Motors both need to urgently reduce their retail networks across the Atlantic to make the remaining dealers more viable.

In the US, franchisees terminated can fight for manufacturer pay-outs using state laws that protect their franchise contracts, meaning the Big Three prefer reductions to happen through natural selection as struggling dealerships collapse.

Chrysler president Jim Press told America's Philidelphia Inquirer: "When you take a third of the market out, a third of the dealers don't really have a business to go forward with."

Press added that Chrysler was trying to "thin the dealers out in a natural way that really is a win-win for both the dealer that's leaving and the dealer that's going to continue the business."

GM chief executive Rick Wagoner plans to cut its US network by a quarter by 2012. He said the network must evolve, with survivors achieving higher volumes to offset costs.

At Ford, chief executive Alan Mulally hoped consolidation would make the network more efficient.

"There's not enough money to buy out everybody," Mulally said. "The real thing is the businesses deciding where it makes sense to consolidate. And we just help with that."

 

If you are not a registered user your comment will go to AM for approval before publishing. To avoid this requirement please register or login.

Login to comment

Comments

No comments have been made yet.