20 Minn. auto dealers back in business

MINNEAPOLIS -- General Motors Co. will reinstate 20 Minnesota dealers set to be dropped from its sales network.

As part of its restructuring, GM last year told about 2,000 dealerships it would not renew their franchise agreements once they run out in October 2010. But the dealerships have said GM treated them unfairly, and last month Congress passed a law requiring an appeals process for the dealers.

To avoid a very large arbitration process, General Motors announce last week the company would reinstate more than 661 dealerships.

Overall, 35 Minnesota dealerships were seeking reinstatement though GM. Six completely terminated dealers and 14 partially terminated dealers will be reinstated.

 "It was one of the best phone calls we've ever had, that's for sure," Steve Whitaker of Whitaker GM Supercenter in Forest Lake said. The dealership was supposed to be 'wound down' by the fall, but Whitaker got the reinstatement call on Friday.

"Its just going to be nice to have the lot full with new cars and people can come in and we'll have stuff to show them. We're here to stay... again," sales associate Jerry Dreckman said.
The dealer hasn't received a new car from the manufacturer for almost a year. Right now, associates have 100 pre-owned vehicles on the lot and just 2 new cars.

Minnesota Automobile Dealers Associate Executive Scott Lambert wouldn't say which GM dealers were reinstated, but he did say that most were in greater Minnesota; most were outside the metro.

"It means a lot to those communities to have these stores come back and it means a lot for customers because now they're going to have more competition," Lambert explained.

Steve Whitaker agreed. 2 years ago, 'Auto Row' in Forest Lake had 5 new-vehicle dealerships. 2 Denny Hecker lots and a Ford lot closed after financial difficulties. If Whitaker would have been shut down, that would have only left Wally McCarthy's Chevy Cadillac on the row.

"That's twice as much choice as one so I think from a consumer perspective that's (Whitaker's reinstatement) a good thing," Whitaker remarked.

There are ten GM dealers and five Chrysler dealers in Minnesota that are still not able to rejoin their manufacturers.

The Minnesota Automobile Dealers Association is warning that the reinstated dealers have not yet received any letters from GM.

"Hopefully there are no strings attached to these reinstatements," Lambert said.

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