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General Motors' announcement on Friday that it will reinstate about 600 U.S. dealerships confirms what many dealers called a foolhardy decision last year, says the head of a Maryland trade group.

"It validates what we've been telling everybody," Peter Kitzmiller, president of the Maryland Automobile Dealers Association, said Monday.

"There was no business justification for closing dealerships," Kitzmiller said. "It didn't make financial sense."

The reinstatements will help not only the dealers, but their customers, said Kitzmiller, who expects many of those reinstated to be Cadillac dealerships.

GM said it would send agreements for reinstatement to 600 of the approximately 1,100 dealerships nationwide pursuing arbitration against the closures.

Still, some of the state's GM dealers are wary.

About 41 GM dealerships in Maryland were closed down last year, said Tamara C. Darvish, CEO of Darcars Automotive Group of Silver Spring.

"We're very pleased to hear [the news], but we haven't seen any evidence of such," she said, referring to GM's statement. Darvish said she has only heard of one dealer that confirmed receiving a reinstatement letter.

"For now, we're in a wait-and-see mode," Darvish said.

"I think they should be reinstating more than that, and I think they will," said John J. "Jack" Fitzgerald Jr., CEO of Fitzgerald Auto Malls in Kensington. He and Darvish have led the Committee to Restore Dealer Rights, representing dealers fighting closure.

"I think their management is learning as they go along," Fitzgerald said. "As they learn more, it's more likely they'll bring back all the dealers."

Geoff Pohanka, president and CEO of the Pohanka Group of Marlow Heights, which has dealerships throughout the state, said he hopes his Cadillac dealership in Fredericksburg, Va., will be among those reinstated. The Pohanka Group lost three of its five GM dealerships through closures.

"GM is out of bankruptcy. Their balance sheet looks a lot better. Now, they've got to make a profit," he said.

Although GM's sales for Chevrolet, Buick, GMC and Cadillac were up 32 percent in February over last year, it was still outsold by Ford for the first time since 1998. GM also suffered a $10.3 billion net loss in 2009, versus a $1.87 billion profit in 2008.

"They realized they cut back too many [dealerships]," Pohanka said. Reinstating the 600 dealerships is a positive step for GM, he said, but he is also cautious about the requirements and conditions that the reinstatements could include.

Darvish said GM could prove its sincerity by reinstating all viable and sustainable dealerships, with no conditions attached.

Kitzmiller also said he hopes GM's action will influence Chrysler, which has more than 400 shuttered dealers seeking reinstatement through arbitration. He said Chrysler has been less willing to compromise than GM in the past.

Rep. Christopher Van Hollen Jr. welcomed GM's announcement.

"This action marks a significant development in our efforts to ensure that these small business owners be treated fairly and given an opportunity to put their employees back to work," said Van Hollen (D-Dist. 8) of Kensington in a statement.

"Last year, I was proud to work with my colleagues in Congress to enact legislation that protected the rights of these dealers through the establishment of a fair and transparent arbitration process," he said. "More than 1,500 General Motors and Chrysler dealers are availing themselves of this process, but GM has taken meaningful action ... to by-pass this step and move directly to full reinstatement for a significant number of dealers.

"It is my hope and expectation that Chrysler will follow suit and make similar offers of reinstatement to their terminated dealers so that we can get people back to work selling more American cars."