The chief executive of G.M., Fritz Henderson, and the vice chairman of Chrysler, James E. Press, said dealerships that sold a smaller number of vehicles weighed down their companies. A more streamlined corps of dealers, they said, was vital for survival.

“I can surely empathize with the dealers who were not brought forward into the new company. And I understand their disappointment more than you could know,” said Mr. Press. “This has been the most difficult business decision I have ever personally had to take. But the decisions had to be made. They were gut-wrenching, but absolutely necessary for Chrysler’s survival.”

…

Chrysler plans to close about 800 dealerships next week, less than a month after informing franchise owners of those plans. G.M. hopes to reduce its dealerships to about 3,500 by the end of next year from 6,000 now. The company told more than 1,000 dealerships recently that they had until June 12 to accept a plan that would allow them to stay open until October 2010, when their current agreements with G.M. expire.

Source/Full Story: NYTimes.com

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