97% of U.S. Suzuki Dealers Take Buyout

Suzuki Motor Corp. says all but six of its 219 U.S. car dealers have agreed to give up their franchises in exchange for a combined $42 million in cash and contracts to run Suzuki parts and service outlets.

Those stores will continue to provide warranty service on the company's vehicles, according to documents the company filed in federal bankruptcy court in California.

Suzuki's American unit sought Chapter 11 protection early last month and plans to exit the U.S. auto market. The company is reorganizing its U.S. motorcycle, outboard boat engine and all-terrain vehicle operations, which will continue to be sold through a separate dealer network.

Car dealers who accepted buyouts by Nov. 30 were promised half the cash payment within 10 days. The balance is due when American Suzuki exits bankruptcy.

The company tells Bloomberg News that dealers who took the offer will be repaid in full, which is unusual in bankruptcy cases. The news service notes that winning support from nearly all its dealers will enable Suzuki to avoid lengthy battles in bankruptcy court over franchise agreements.