Short and long answer: it doesn't. Matter of fact, it probably hurts them more than it could conceivably help. The costs saved are marginal at best. The GM Zone and District managers have one less outlet to call on and support. Small potatoes.
The dealership network for all the car companies is made up of true entrepreneurs. They buy their franchise, buy the cars that sit on their lots, place and pay for all their advertising, staff the sales and service departments and perform every other function that goes into running a business.
Moreover, they compete with other auto brands as well as sister Chevy dealerships. If the culling of the dealership list doesn't really save cost, then why do it? You're not going to move more iron with FEWER outlets.
The reason is simple. To the outsider it gives the appearance of action. See, look we're cutting costs to save the business. The people putting the downsizing plan together don't really understand the dynamic of how cars are sold. The dealers are not GM employees. They are independent contractors that add minimal fixed or variable costs to the mother ship's bottom line.
Rather, dealer survival is the ultimate in marketplace Darwinism. If cars don't leave the lot, they're out of business. Matter of fact, the dealership segment over the last 10 years has undergone tremendous consolidation. The era of mega dealerships, the auto industry's version of the big box, is well underway.
Meanwhile, people are on the street that might have survived if the market were left to decide. The typical dealer employs 100 people. Most of these outlets are in smaller communities. Moreover, the local dealer places local ads, uses local suppliers and supports Little League teams and charities.
I still don't see how this enhances the value of General Motors.
