The announcement came a day after the auto giant announced it would eliminate its 83-year-old Pontiac brand.
In a Tuesday afternoon video conference, General Motors Corp. officials told GM dealers nationwide that they plan to cut more than 2,600 dealerships by 2010.
Specific dealers would be notified starting the week of May 11, according to a source who saw the conference but requested anonymity because the video conference was private.
The source said closings would fall into three categories. Between 1,000 and 1,500 would be expected to close themselves. Another 1,000 to 1,200 would be shut down, either because they were underperforming or deemed to be too small, the source said. A few hundred remaining locations would be told of their demise by the end of June.
"That's the tough one because they're good dealers that just won't make the cut," the source said, referring to the last segment.
The source said GM would select the closures based on sales figures, location demographics, proximity to other dealerships, the strength of their facilities and other factors.
The news came a day after GM said it would eliminate its 83-year-old Pontiac brand, a turnaround from an earlier plan to retain it as a niche brand containing one or two cars. Local GM dealers attributed the change to pressure from the federal government, which has loaned the struggling company $15.4 billion and demanded restructuring by June 1.
"We anticipated up to (Monday) that it'd continue to be around," said Mark Donahue, general manager at Plumstead's Fred Beans Cadillac Buick Pontiac GMC. "I think it was the government involvement."
Donahue said Pontiac is a relatively small percentage of the dealership's sales.
"We probably only sell five or six Pontiacs per month," he said. "Pontiac sales have been declining. I think (ending) Pontiac was a hard decision that had to be made to move along."
Fred Beans has about 50 Pontiacs on the lot and another 30 or so arriving soon. Donahue said he is hoping GM offers incentives to help the dealerships sell the remaining inventory. He is hoping to eventually tap additional Buick lines to fill the space Pontiac had occupied on the lot.
Peter Lanzavecchia, principal at Burns Buick Pontiac GMC in Marlton, N.J., stressed that GM would continue to honor Pontiac warranties and supply service parts for a minimum of 10 years. Pontiac accounts for about 25 percent of the dealership's sales, Lanzavecchia said.
He said GM has been pushing for consolidation of Pontiac, GMC and Buick dealerships for years. As a result of those efforts, there are only a few dozen dealers left that just sell Pontiacs.
"I hope that if Pontiac was a drag on the Buick-GMC channel, the channel will be healthier now," he said.
Glenn Davis was part of that consolidation in late 2007, when he sold Richboro's Davis Pontiac to O'Neil Buick GMC in Warminster.
"We were a single-point Pontiac dealership and we had been under pressure to consolidate with Buick and GMC under one umbrella," Davis said Tuesday. "We decided to incorporate into O'Neil."
Now, Davis said he considers himself lucky.
"GM made it reasonably attractive to do it and had I stayed around longer, it might not have been a good situation for me," said Davis.
He said he was not surprised that Pontiac was dropped given the alternative may have been shutting down Buick, which has become very popular in China.
GM also announced that it will either sell or close Hummer, Saturn and Saab to focus on four core brands: Chevrolet, Cadillac, GMC and Buick.
