General Motors Corp. may lose as many as 40 percent of its 6,500 U.S. dealerships should lender GMAC LLC default, a key retailer for the automaker said. "There's so many dealers on the edge, if GMAC goes out of business 30 to 40 percent of dealers won't be able to get financing from anywhere else," Martin NeSmith, a liaison to GMAC as member of GM's National Dealer Council, said in an interview. "They'll go out of business."
Dealers face a double threat as GMAC and GM teeter toward insolvency. GMAC said Wednesday that it lacks the funding it needs to become a bank holding company and free up more money for dealer-inventory financing, called floorplan. GM, which owns 49 percent of GMAC, said it may run out of cash this month without at least $4 billion in federal loans ensared in a U.S. Senate debate.
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