DETROIT — Chrysler and General Motors (GM) executives, along with several dealers, testified before Senate last week regarding the planned closure of several thousand auto dealerships.

The automakers told Senate they plan to make it easier for the closing dealerships to exit the market, however dealers that were asked to stay on with the automakers complained about the short time frame for signing so-called “Participation Agreements.” Those closing also complained about the difficulties of winding down business and said there was a lack of assistance from the car companies, as originally promised.

Chrysler plans to close 789 dealerships as part of its restructuring, and GM may close up to 2,500.

Following the June 3 hearing, both GM and the National Automobile Dealers Association issued statements saying that they will work together to come to an agreement that works for both parties. While no specific details are provided, GM has said it is willing to make certain amendments to its Participation Agreements.

"The consolidation of GM’s dealer network nationwide is a very difficult, but necessary part of GM’s overall reinvention efforts,” said Mark LaNeve, GM North America vice president, vehicles sales, service & marketing. “During testimony last week before the Senate Commerce Committee on this topic, the National Automobile Dealers Association (NADA) expressed concern over some specifics in GM’s Participation Agreements for our dealers. In his corresponding testimony, GM President & CEO Fritz Henderson committed that GM would meet with the NADA and come to an understanding over these concerns. We are happy to report that after meetings last Friday and Saturday with both NADA and GM’s National Dealer Council (NDC) leadership, we now have a better collective understanding of the issues. As a result, GM will be sending our dealers a letter clarifying various subjects in the Participation Agreement, most notably dealing with competitive makes and performance standards.”

LaNeve also stated that the company will continue to evaluate all GM dealers against a common set of performance standards to ensure a “fair and robust” selection process.

“While these efforts are extremely difficult for all involved, we believe that the GM dealers moving forward with the company strongly support actions to improve their long-term competitiveness and business opportunities,” he said.

LaNeve said to date, nearly 90 percent of GM dealers have signed or verbally agreed to the participation agreements, while almost 75 percent have done so with the wind-down agreements. GM expects to have at least 95 percent of the signed documents by its June 12 deadline.

NADA Chairman John McEleney said the association is pleased with outcome of their talks with GM and Chrysler.

“We’re especially pleased that GM moved so quickly to meet with NADA and the GM National Dealer Council on such short notice to review and to discuss the serious concerns that dealers had with the original agreement,” said McEleney. "I especially commend GM for its flexibility and its willingness to make substantive clarifications and modifications to address dealer concerns. We believe GM has made a very good faith effort, given the unprecedented circumstances facing GM and the industry."

McEleney added, “While NADA is not in a position to formally endorse the Participation Agreement, we believe the revised document addresses the majority of dealer concerns.”

In other GM news, yesterday the automaker issued an announcement stating it will wind down production of its heavy duty trucks. ”After four years of working with multiple potential buyers, General Motors has decided to wind-down its medium-duty truck operations,” the automaker said.

Production of the Chevy Kodiak and GMC Topkick medium duty trucks will be ceased by the end of July.