GM backs off closing dealerships

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General Motors, seeking to avoid a protracted legal battle as it focuses on increasing sales, plans to reinstate 661 dealerships cut last year as part of its bankruptcy reorganization.

That is more than half of the roughly 1,100 dealers who filed to challenge GM's terminations through an arbitration process established by Congress, according to media reports.

GM said it was calling and sending letters to the dealers being allowed to stay open and that they would receive notification this week.

"By doing this, we save a lot of time, energy and dollars, saving us and dealers from going through what could be a very long arbitration process," Jim Bunnell, GM's general director of dealer network support, said in a conference call with reporters.

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