GM, Chrysler Finishing Dealer Cut List

DETROIT (Dow Jones) -- Thousands of General Motors Corp. (GM) and Chrysler LLC dealers may learn their fate within the next few days as both auto makers finish the list of the dealerships they plan to cut.

GM dealers will be notified some time this week as to whether they will continue to receive new cars and trucks from the auto maker, GM Chief Executive Officer Fritz Henderson said Monday. Henderson said he expects to "wind down"' most of the targeted dealerships during the year.

Chrysler, meanwhile, is also expected to file its list of dealers it plans to cut with a U.S. bankruptcy court. The third-largest auto maker filed for bankruptcy April 30 after failing to win concessions from its creditors. GM is trying to avoid a bankruptcy filing and must institute a variety of cost reductions, such as consolidating its dealer network, by June 1.

GM is planning to close 2,600 of its 6,246 dealers while Chrysler is looking to shrink its network from 3,188.

"It's too early in the process to comment," said Chrysler spokeswoman Carrie McElwee said. "When we have information we can share, we will communicate that information directly to our dealers. "

U.S. auto makers have been handicapped by their large dealer networks. The size has fostered price in-fighting between dealers serving the same market while also allowing weaker locations to continue operating by offering bigger incentives on their inventory.

Foreign auto makers, such as Toyota Motor Co., have controlled their networks, giving dealers larger markets and quickly ridding themselves of weaker locations when needed.

-By Jeff Bennett and Sharon Terlep; Dow Jones Newswires; [e-mail]; 248-204-5542