GM cuts two-fifths of dealerships in Canada

OTTAWA, May 20 (Xinhua) -- General Motors confirmed Wednesday that it has decided to cut two-fifths of its dealerships across Canada in its bid to restructure under financial difficulties.

A GM spokesperson said letters were sent Wednesday to 245 of 709 dealerships in Canada informing them that their sales-and-service relationships will be ending. The move was being done in an effort to create a "more competitive dealer network," the spokesperson said.

GM Canada dealers employ about 33,000 people nationwide. The company said the cutbacks were part of its "more aggressive operating plan" brought on by heavy pressure from the federal and Ontario governments as a return for financial aid.

The company said it plans to focus on key urban markets and build "a more competitive dealer network with higher volumes, while continuing to maintain the strongest and broadest dealer network in the country."

Last week, the company announced plans to close 1,100 of its 6,000 dealerships in the United States by late next year.

GM is now in the process to work out a new cost saving plan with the Canadian Auto Workers to ensure it receives funding from the Canadian federal and Ontario governments.

Canadian Industry Minister Tony Clement has given the two sides until May 31 to strike a deal.