General Motors is positive about reaching a settlement with dealerships in India before stopping sales in the nation although half say the compensation available is too low, individuals knowledgeable about the matter stated after the first round of discussions.
American automaker last month stated it would stop offering passenger cars by the end of the year after 20 years in a market where it has less than one percent.
It is now entrusted with reducing fallout as it reorganizes its money-losing India operations, which will keep making automobiles for export. At the same time, the company has had to ward off an attack from a hedge fund requiring modification at the top after a 16 percent stock rate fall throughout the present CEO’s period.
GM concluded a first round of talks on Wednesday with its 96 India dealers, who run 120 dealers, and the company is positive its settlement terms will be accepted by a large bulk, a person at GM India stated on condition of anonymity.
GM informed Reuters discussions with dealers were confidential.
“We are consulting with dealers individually and resolving a plan that addresses their issues,” a representative stated. “GM India is working straight with our dealers to transition to authorized service outlets and to acknowledge a few of the investments made in dealerships.”
However GM’s Dealers Association Board (DAB) comprising 15 high-sales dealers stated the settlement available was minimal and not enough, in a June 6 e-mail to CEO Mary Barra, revealed to Reuters by one DAB member.
2 other DAB members told Reuters that about 50 dealerships were disappointed with the terms and have added to a fund created by DAB for use in case of any legal action.
The president of country’s Automobile of Auto Dealers Associations, John K. Paul, stated numerous dealerships were preparing legal action in India and checking out the possibility of a class action suit in the United States. He stated they intended to complete strategies this month ahead of a second round of talks.
