GM Canada To Cut 245 Dealers

TORONTO (AP) -- General Motors Canada is telling almost 250 dealers they will lose their franchises next year as the automaker thins dealer ranks to make the remaining outlets more profitable.

GM Canada said Wednesday that is telling some dealers that their sales and services agreements won't be renewed when they expire in October 2010.

Spokesman Stew Low said letters were being sent to about 245 of GM Canada's 709 dealers. Further consolidation is expected to increase the number of shuttered dealerships somewhat beyond that by the end of 2010.

GM Canada plans a 42 percent cut in dealers. That is in line with what the General Motors Corp. announced in the U.S. Last Friday, GM Canada's parent company told 1,000 to 1,200 U.S. dealers they would lose their GM franchises next year.

While General Motors of Canada has cut its direct work force to 12,000 people, the dealer chain is estimated to employ 33,000 people.