G.M. Dealerships in East Texas

TYLER - About twenty-percent of G.M. dealers nation-wide were told their contracts weren't being renewed with the manufacturer.

So how will this affect dealers right here in East Texas?

We called nearly all G.M. dealers in East Texas, none of them said their contracts with G.M. were canceled.

Monte Hall has been a General Motors fan all of his life.

"I go back involved with GMC for three generations," Mr. Hall says.

He says he's never seen car manufacturers cancel dealer agreements and he never really expected to see it.

"We've never seen that happen. We're really in some uncharted waters," Mr. Hall says.

G.M. representatives say, there are too many G.M. dealers creating too much competition among them, driving prices down.

So the dealers that will be affected aren't just in small towns, it will include dealers in big cities that are right next to others.

So when these dealerships close down some who just bought a car wonder, who will take care of them?

"The dealers that are left standing after this are going ito be more than capable," Mr. Hall says.

In fact Mr. Hall's dealership has already been taking care of those who bought a car before Tyler's Saturn dealership closed up.

"We've seen a significant number of Saturn cars come in for service we've handled some warranty claims for those people," Mr. Hall says.

So how did some dealers survive while others are being phased out?

"Take care of the customers and that keeps the doors open," Mr. Hall explains.

Mr. Hall says G.M. graded dealerships on their customer satisfaction index, sales numbers, and facilities to decide who will stay open.

"Fortunately, we're one of those dealers," says Mr. Hall.

But unfortunately, analysts say this is not the worst of it.

By next year, General Motors plans to drop down to only 2,600 dealers, about forty-percent of total G.M. dealers