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GM to Discontinue Oldsmobile After 2004 Model Year

September 7, 2001

General Motors Corp. finally put a deadline on Oldsmobile, saying it will kill the brand once 2004 models are sold -- sooner if demand dries up.

About 400 of Oldsmobile's 2,800 dealers so far have told GM they plan to stay open indefinitely, according to Oldsmobile spokesman Gus Buenz. Others haven't decided.

The fact that GM could kill the brand sooner than 2004 worries some dealers. GM is balking at letting dealers sell substitute brands, making it hard to stay open, they say.

Stuart Zalud, an Olds-Pontiac dealer in Shaker Heights, Ohio, says he can't afford to operate the Pontiac dealership without the Oldsmobile franchise, and GM won't let him substitute another brand for Olds. "I am going to end up

getting another franchise and getting out of GM," he says, adding that he'll uproot his family to settle elsewhere. His family has sold

Oldsmobiles in the Cleveland area for 40 years, he says, so the change is wrenching "emotionally and financially."

In a letter dated Sept. 7, General Motors Corp. provided all Olds dealers with a detailed schedule of the phase out of the different Olds models.

GM made it clear that this was "not a notice of termination and the term of your current Oldsmobile Dealer Agreement remains unchanged."

"There's no doubt that the additional information helps for planning purposes," said William Bradshaw, the National Automobile Dealers Association's Industry Relations GM franchise chairman. "But it also reminds us that hundreds of dealers likely will be going out of business, and that GM still faces major challenges. We've heard a lot lately about all the good things GM is doing. Our main concern is that GM treat all Olds dealers in a fair and equitable manner."

NADA says this has given rise to additional questions, which the dealers' association is pursuing with the automaker, about what exit strategy GM has for its dealers who can't

survive without Oldsmobile.

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