General Motors is to drop about 1,600 US dealers as it struggles to slash billions of dollars in operating costs and debt ahead of an anticipated bankruptcy filing by the end of the month.
GM plans to drop about 1,100 of its smaller and less profitable dealerships by letting their franchise agreements expire when they come due in October 2010.
The automaker also expects to drop another 470 dealerships by cutting its Saab, Hummer and Saturn brands.
Taken together with a similar announcement by bankrupt Chrysler a day earlier, more than 2,300 US vehicle retailers have been put on notice that they are being dropped.
The unprecedented closures under the direction of the Obama administration put an estimated 100,000 jobs at risk.
The plan is for GM to end up with about 3,600 showrooms by the end of next year for its Chevy, Cadillac, Buick and GMC brands, which would represent a 40% reduction in GM's dealership network.
GM is not offering dealers any compensation this time but offered to help them wind down their operations. The risk of a drawn-out legal battle is another reason analysts believe it will follow Chrysler into a bankruptcy filing.
US vehicle sales are at the lowest levels since the early 1980s with no prospect of a short-term rebound. On the annualized basis tracked by analysts, sales are below 10 million vehicles, down from over 16 million two years ago.