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May 15, 2009    

GM to close more than 1,000 dealerships

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by Kay Murchie
GM to close more than 1,000 dealerships

In an attempt to slash costs and fight off bankruptcy, struggling US carmaker General Motors (GM) has announced plans to close 1,100 of its dealerships.

It is also severing ties with another 470 Saturn, Hummer and Saab dealers, according to the BBC.

The news comes just 24 hours after fellow US carmaker, Chrysler, announced it would close 789 US dealerships as part of a restructuring programme.

A spokeswoman for GM said the dealerships have until October 2010 to close - the dealers represent around 25% of its network.

Meanwhile, the company is also in talks with unions to reduce its wage bill.

GM has a deadline of 1 June to restructure the business in order to achieve a multi-billion dollar loan from the Government to avoid bankruptcy protection.

So far, GM has received $15.4 billion in Government loans to prevent it from collapse, in the wake of plummeting sales.

However, earlier this week Fritz Henderson, newly-appointed chief executive, said entering bankruptcy protection is becoming increasingly likely.

GM recently announced plans to shut 16 factories this year and axe 27,000 jobs.

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