General Motors recently sent out a “wind-down” agreement to its 1,124 dealers earmarked for closure, with the terms of that contract coming to light on Wednesday. Under the terms of the agreement, GM will offer dealers between $100,000 and $1 million to wind down their franchises over the next 17 months.
The amount offered will vary from dealer to dealer and will be based on inventory levels, cost structure and overall dealership rank, according to Automotive News. Most dealers will use the funds to clear out current inventories.
However, there are a few catches. Dealers that sign the wind-down agreement will not be allowed to sell their unsold inventory back to GM. Dealers will also be prohibited from suing GM until their franchise agreements expire in October of 2010. Lastly, those willing to ink the dotted line will be required to stay in business until at least January 2010, but will not be allowed to order new inventory from GM.
As GM will be shutting down it Pontiac brand by the end of 2010, Pontiac dealers won’t be eligible for the same perks as other GM dealerships. Those owning a Pontiac dealership will only be offered between $100,000 and $200,000.
