GM eliminating close to 1,100 dealer franchises

The cuts are part of a larger GM plan to drop 2,600 of its 6,200 dealerships as the automaker tries to restructure to become profitable again. The moves likely will cause the loss of thousands of jobs and governments will lose untold dollars in tax revenue as dealerships are forced to close.

Besides the 1,100 dealership cuts,the company will provide updates to about 470 Saturn,Hummer and Saab dealerships on the status of those brands,which it plans to sell.

GM said it expects to lose more dealers through attrition. Ultimately,about 90 per cent of the remaining dealerships will stay with GM. Letters bearing the bad news began arriving on Friday morning. The letter states that dealers were judged on sales,customer service scores,location,condition of facilities and other criteria.