At Least 18 Minn. GM Dealers Closing

At least 18 General Motors dealerships on Friday notified the Minnesota Auto Dealers Association they had received word GM won't be renewing their franchise.

About 1,100 GM dealers nationwide were expecting to learn their fate sometime Friday , by either a phone call or FedEx letter.

One of those letters landed at the Walser Buick-Pontiac-GMC in Bloomington, Minn. around 10 a.m. Friday. The Walser Group decided to be upfront about the letter -- a notice GM wouldn't be renewing their franchise after October of 2010.

The bad news comes exactly one day after Chrysler announced the closure of 19 dealerships in Minnesota and nearly 800 dealerships nationwide.

GM isn't making the list public, so as to not scare away any potential customers. But with so much time, Walser Group says they don't see the notice as set in stone.

"General Motors still has to present this plan to the federal government by the end of May, so we're not ready to throw in the towel quite yet," Walser's Doug Sprinthall said.

But ending contracts with so many dealers, part of the federal government's required restructuring, doesn't make complete sense to those in the car business.

"Chrysler and General Motors are not going to save any money by getting rid of a third or half of their distribution system." Scott Lambert, of the Minnesota Auto Dealers Association, said.

The dealer's association says GM's moves will hurt, ultimately translating into about 65 dealerships and 3,000 jobs in the state.

"We think it's wrong for the government to tell these people to go out of business," Lambert said. "These decisions should be made by business people."

What the strategy may be, according to Walser, is to make fewer, stronger dealers.

"I think for the surviving dealers, having a bigger slice of a smaller pie is a good thing," Sprinthall said. "There might be some residual brand effects for the manufacturers, but in the hierarchy of things that will help General Motors I don't think this is near the top."

All the Walser employees will be reassigned to jobs at other dealerships, but the change is still a year-and-half away.

The Minnesota Auto Dealers Association says the letters aren't coming all at once, but rather in several waves, so not all the affected dealership learned of their fate on Friday.