AP HEADLINES

Document Governors' letter seeking federal help for auto industry (PDF) Multimedia Toyota recall 50 Years of Honda in the U.S. Look at Detroit automakers The Cars That Made Chrysler Famous Latest News GM to reinstate 600 dealerships slated to be cut Sigma Designs posts strong sales growth in 4Q Bob Lutz, GM's 'ultimate car guy,' to retire GM's China sales up 51 percent in February GM shuffles sales leaders for 2nd time in 3 months GM sales exec says company won't reopen factory Ford sales jump; outsells GM on strong car demand

Buy AP Photo Reprints

Your Questions Answered Ask AP: Tax credits, disposing of recalled goods

NEW YORK (AP) -- General Motors Co. will reinstate 661 dealerships it sought to drop from its sales network.

GM executives said Friday that 661 dealerships - more than half of the 1,100 seeking to stay with the automaker - will receive letters giving them the option to remain open. The company said it made the move because it would not have enough time to negotiate with all 1,100 dealerships within a four-month window imposed by the federal government.

"By doing this we save a lot of time, energy and dollars," said Jim Bunnell, GM general manager of network support, saying the company wished to avoid a "very large arbitration process."

As part of its restructuring, GM last year told about 2,000 dealerships it would not renew their franchise agreements once they run out in October 2010. But the dealerships have said GM treated them unfairly, and last month Congress passed a law requiring an appeals process for the dealers. About 1,100 dealers have appealed GM's decision.

GM's decision to keep the additional showrooms open effectively shrinks the number of appeals it has to contend with. Arbitration hearings for the dealers who did not get offers will begin later this month.

The cuts to GM's 6,000-dealer network were designed to compensate for much lower demand for cars and trucks, but some dealers have argued that lots that are still profitable are at risk, and that the automaker hasn't offered enough details about how it's choosing which businesses to shutter.

GM would not offer any details on Friday about which dealerships it was reinstating and where they are located. The company said it hoped to have every letter of intent with dealerships by Monday. At that point, dealers have 10 days to respond and 60 days to meet a set of criteria that would allow them to stay with GM.

A spokeswoman with Chrysler Group LLC, which has cut 789 dealers, said the company was preparing a statement in response to questions about whether they also intended to reinstate dropped dealerships. Chrysler showrooms slated for closure are also appealing to stay open, though it remained unclear how many.

Congress-brokered talks between dealer groups and the automakers began in September. But those talks stalled over disputes about the review process for targeted dealerships and other issues. Looming over the fight has been the threat of federal legislation to deal with the closures. Lawmakers warned that if a deal wasn't reached, that legislation would move forward.

The White House has opposed the legislation over concerns that it could hurt GM's and Chrysler's efforts to rebound from their government-led bankruptcies.

© 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy.