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Workers remove some of the old signage at a GM dealership in Toronto.

Peter Power/The Globe and Mail

Twenty General Motors of Canada Ltd. dealers who are fighting the closing of their stores by the auto maker will remain open until at least the end of January as their legal challenge to the shutdowns plays out.

The approximately 240 dealerships across Canada that were sent termination notices by GM a year ago were originally scheduled to be closed by Oct. 31, but the court case involving the 20 dealers - who want the court to force GM to reverse its decision to close their outlets - is not scheduled to be heard until November.

Dealers confirmed the extension of the closing date as they step up political pressure on the federal and Ontario governments to urge GM to reinstate some dealers in Canada as its U.S. parent has done by restoring about 900 of 2,600 dealers who were chopped in May, 2009. To add to the legal challenges facing GM Canada, three Quebec dealers have launched a lawsuit also seeking reinstatement.

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Opposition MPs in Ottawa have asked the federal government - which shares ownership of 11.7 per cent of General Motors Co. with the Ontario government - to explain why the company has refused to reinstate dealers here while it is doing so in the United States even though $10.5-billion in Canadian taxpayer money helped save the company last year.

"Canadians don't like it when Americans get the benefit of their dollar and that's what's happening," said Tom Donnelly, who owns Donnelly Pontiac-Buick in Ottawa and is one of the 20 dealers involved in the lawsuit.

The lobbying will continue during the summer, Mr. Donnelly said, with dealers meeting MPs in their ridings to push their case and put political heat on GM Canada.

"We are going to be relentless in our push to justice here," he said.

GM Canada spokesman Tony LaRocca would not confirm the extension, saying that the company will not provide updates on the court cases.

Kevin Williams, president of GM Canada, was asked several questions about the lawsuit and the dealership situation during a breakfast with a small group of reporters last month.

Mr. Williams would not discuss whether the company is prepared to settle the suit by the 20 dealers before it goes to trial or why the Canadian unit is not following the lead of its parent company and restoring some dealerships in this country.

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But he noted that many dealers themselves and dealer councils said the company had too many outlets in Canada.

"We needed to make changes because in some cases we were over-dealered and we couldn't get to industry benchmark levels in terms of throughput, return on investment, return on sales and profitability," he said.

Jean-François Dubois, who owns Dubois & Frères Ltée, a Pontiac-Buick outlet in Plessisville, Que., and is one of the three Quebec dealers suing GM, said he complied with GM Canada's directives to upgrade his store and believes he was among GM's top Quebec dealerships.

"I always made money. I always had good years," Mr. Dubois said.

The dealers in both the Quebec suit and the group of 20 did not sign wind-down agreements when they received termination notices from GM Canada in May, 2009. The group of 20 has already won one round in its legal case when the Ontario Superior Court ruled that the case will be decided in court and not in the National Automobile Dealer Arbitration Program, an arbitration mechanism set up by auto makers and dealers in the 1990s.

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About the Author
Auto and Steel Industry Reporter

Greg Keenan has covered the automotive and steel industries for The Globe and Mail since 1995. He also writes about broader manufacturing trends. He is a graduate of the University of Toronto and of the University of Western Ontario School of Journalism. More

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