General Motors Closing 1,100 Dealerships

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WASHINGTON - The pain workers in Detroit have been feeling for months is now spreading to Main Street.

On Friday, General Motors is announcing that it is closing 1,100 dealerships. It looks like the former auto giant will soon join Chrysler in bankruptcy court.

Consumer Demand 

Be prepared to drive farther to find your local American auto dealer. A hit list of GM dealers to be closed includes dealerships in every state except Alaska.

The struggling automaker is tightening its belt to match consumer demand.

"The business model of the future in retail is fewer stores with high throughput," explained Autonation's Mike Jackson. "That's a win for the consumer you can actually lower your prices, because you're fixed cost is so much less per vehicle."

Communities Will Feel Dealership Loss 

But in many communities, it feels like the end of an era as long-time family-run dealerships prepare to shut down their showrooms.

There's many, many people that will feel the ripple effect of any dealership going out of business," said John Phelan of the Chicago Automobile Trade Association.

One economist with the National Auto Dealers Association estimates the average dealer spends more than $16 million in their communities each year through taxes and charitable contributions.

GM Facing June 1 Deadline to Cut Costs 

And now, faced with a June 1 deadline to cut costs and debt, GM's chief executive officer says bankruptcy is likely. In fact, some say they are not sure how the ailing auto giant can restructure without Chapter 11 protection.

The release of GM's list of dealers to be shut down comes one day after Chrysler sent closure notices to 789 of its dealers.

"What we're trying to do now is an orderly wind-down," said Integrity Chrysler's Dave Wick. "We quit selling cars on Saturday and right now, we're just wrapping up any details of transactions in process."

It's an emotional pill to swallow, especially in an economy where jobs are scarce.

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