GM to cut up to 1,200 U.S. dealers: source

DETROIT Fri May 15, 2009 10:56am EDT

Pontiac G8 sedans sit on a lot for sale at a General Motors auto dealership in this file photo. REUTERS/File

Pontiac G8 sedans sit on a lot for sale at a General Motors auto dealership in this file photo.

Credit: Reuters/File

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DETROIT (Reuters) - General Motors Corp plans to eliminate up to 1,200 U.S. dealerships, which are expected to begin receiving notices from the embattled automaker as soon as Friday, a person familiar with the plan said.

The dealer reductions would be in addition to anticipated cuts from dropping unprofitable brands including Saab, Hummer and Saturn, the source said, and would be part of GM's already announced plan to get rid of about 2,600 of its roughly 6,200 U.S. dealerships as it struggles to streamline costs.

The source said that GM has been losing 60 to 65 U.S. dealers per month as those retail franchises succumb to the unprecedented industry sales downturn.

U.S. auto sales are near 27-year lows with no signs of immediate recovery in sight.

GM plans a news conference on Friday to provide details of its dealer consolidation activities. GM's dealer plan follows Chrysler's announced plans on Thursday to cut 789 U.S. dealers out of nearly 3,200.

(Reporting by David Bailey, editing by Gerald E. McCormick)

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