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Decisions by General Motors Co. and Chrysler Group to end direct talks with auto dealers groups are greatly disappointing, Maryland auto dealers said on Monday.

GM and Chrysler, who have ended talks with dealer groups contesting the automakers' plans to close dealerships, now plan to form a binding review process for dealerships closed or targeted for closure, in an attempt to settle talks with dealer groups unhappy about the situation.

Chrysler closed almost 800 dealerships last summer and GM announced plans to shut down 1,350 by next October.

GM executives said that they will begin to implement the plan in mid-January provided that legislation in Congress that advocates say would protect the rights of terminated auto dealership owners and restore state franchise rights that were taken out during bankruptcy proceedings does not move forward.

The action looks like an admission that GM and Chrysler need the dealerships back because their sales are down, said John J. "Jack" Fitzgerald Jr., founder and president of Fitzgerald Auto Malls, which has dealers in Rockville and Gaithersburg, among other Maryland cities. Fitzgerald is also a member of one of the dealers' groups, the Committee to Restore Dealer Rights, which includes Tamara Darvish of Darcars Automotive Group of Silver Spring.

Chrysler reported that sales for November declined 25 percent from the same month a year ago, while GM's November sales dropped only 2 percent.

In Maryland, the number of new-vehicle sales for October declined by 11 percent from a year ago, according to state figures. The value of those sales dropped 3.5 percent to $593.2 million. Used-car sales rose slightly, by less than 1 percent.

GM and Chrysler "told both the court and the Congress they would save $2 billion cutting [the dealerships]," Fitzgerald said. "So they're stuck with that position, and I suspect they are asking Congress to put the dealers back for them."

At no point in the negotiating process did GM or Chrysler present a plan that would realistically get more than a few dealers back in business, Fitzgerald said. 

Leaders of the National Automobile Dealers Association in McLean, Va., said in a statement that the GM-Chrysler proposal did not establish a "sufficiently meaningful process that provides for a reasonable opportunity for dealer reinstatement." The group plans to continue to work with members of Congress on the dealers' rights legislation.

Peter Kitzmiller, president of the Maryland Automobile Dealers Association, could not be reached on Monday.

While the GM-Chrysler plan is a "step in the right direction," it still falls short of what is needed to reinstate the dealerships, said U.S. Rep. Christopher Van Hollen Jr. (D-Dist. 8) of Kensington.

"Over the past several months, I have worked ... to help reinstate profitable dealerships," Van Hollen said in a statement. "The House of Representatives, by a wide margin, passed a measure earlier this year to restore terminated dealerships.  However, in an effort to find a non-legislative resolution to this matter, we convened talks with the auto dealer groups and the manufacturers. While both sides offered significant concessions, these efforts have fallen short."

Van Hollen added that he plans to "re-double my efforts to enact legislation that will give auto dealers a fair and reasonable opportunity to get back into business."

The GM plan announced late last week includes a commitment to advise all Chevrolet, Buick, GMC and Cadillac dealerships that received a complete wind-down agreement of the criteria used by GM in the selection of that dealership for wind-down; accelerated wind-down payments to dealers consistent with the terms of their wind-down agreements; a process to resolve open issues identified by dealers related to the operation of wind-down dealers; and placement assistance for service technicians and other dealership employees.