GM Contacting Dealers On Closures;To Update On Future Of Brands

General Motors Corp. (GM) said Friday it has notified 1,100 dealers they will be phased out of business by October 2010 as part of plans to eliminate 2,369 stores by the end of next year.

GM also said Friday it will update 470 Saturn, Saab and Hummer dealers on the status of its efforts to offload those brands.

"It is imperative that a healthy, viable GM have a healthy, viable dealer body that can not only survive but prosper during cyclical downturns," GM sales chief Mark LaNeve said in a statement. "It is obvious that almost all parts of GM, including the dealer body, must get smaller and more efficient."

The cuts are part of GM's efforts to downsize as it faces a June 1 deadline from the Obama administration to restructure or file for bankruptcy.

Determined to avoid the huge costs involved with cutting Oldsmobile brand dealers earlier this decade, GM has said it will draw down dealer inventories and allow contracts to run out naturally.

The auto maker will not renew contracts of dealers who own stores GM thinks should close. Most of GM's contracts with dealers expire in October 2010.

-By Sharon Terlep; 248-204-5532; [e-mail].