CADA Says Some Canadian GM Dealers Deserve Reinstatement, Too
OTTAWA, Ontario — In light of the reinstatements General Motors announced are occurring in the U.S., the Canadian Automobile Dealers Association is calling for a similar move in its country.
More specifically, CADA is calling the automaker's dealership reduction process "flawed" and alleging that General Motors Canada made mistakes in terminating 240 dealers. The group is asking GM Canada to restore the franchise rights for at least some of the Canadian dealerships it rejected.
South of the border, GM plans to reinstate more than 600 dealers in the U.S., as reported earlier this week in Auto Remarketing. About 661 American GM dealers were being sent Letters of Intent for reinstatement.
Essentially, CADA wants GM Canada to follow suit in bringing back some of its rejected stores.
"It is clear that the process used to terminate some 240 GM dealers in Canada was flawed," commented Richard Gauthier, CADA president and chief executive officer.
"Based on the American admission, it is clear GM Canada has made some mistakes and needs to own up to these mistakes and reinstate Canadian dealers just as they are doing in the United States," he added.
CADA argues that shutting down 240 GM stores in Canada would downwardly impact the nation's economy and "very simply should not happen."
"It is inconceivable that in the termination of 240 of its dealers, GM Canada did not make a single error," Gauthier added. "The process used in the United States was obviously flawed and the process in Canada has been very problematic."
According to CADA, GM Canada has "always taken the lead" from its U.S. counterpart, and this plays a pivotal role in how CADA reviews the dealership reduction decision process.
For instance, CADA points out that GM was given Canadian taxpayer money as part of the joint Canadian-U.S. bailout process, which included plans for dealership cuts in both countries.
As such, the association argues that "it makes sense to Canadian taxpayers" that Canadian small business operators and employees — a group that includes dealers — be given a fair shake just like those in the U.S.
Furthermore, CADA says that closing 240 GM stores in Canada essentially means losing over 12,000 sales in "every region" of the country.
"GM Canada has an opportunity to correct an egregious wrong to the Canadian small business community, thousands of employees and the Canadian taxpayer," Gauthier stated. "They need to step up and do the right thing as the parent company in the United States has done."