MercoPress. South Atlantic News Agency

General Motors to close 1.100 dealerships

General Motors, the US auto giant, has told 1.100 dealerships that they will be closed down as the company struggles to survive amid an economic crisis. The shutdowns are just part of a larger plan to shut 2.600 of its 6.200 dealerships as the car manufacturer makes cuts in an attempt to become profitable again. The move is likely to cause the loss of thousands of jobs across the US.

“We are telling them, basically, that you are not going to fit into the picture long term, but between now and then we will help wind the business down the best way individually with each dealer,” John McDonald, GM spokesman, said on Friday.

Mark LaNeve, GM vice-president, said many of the dealers notified this week were selling 35 or fewer vehicles per year.

Barack Obama, the US president, has given GM until June 1 to restructure its debt, agree concessions with its workers union and prove it can survive as a viable business.

GM announced in April that it was to slash a further 21.000 jobs and close plants and dealerships, while Rick Wagoner, the company's former chief executive officer, was ousted by the Obama administration in March.

Chrysler, another struggling US auto-giant that has already gone into the bankruptcy process, also announced this week it plans to close 789 of its showrooms.