Remember This

[CMayne]

For all of you "smaller" GM Dealers out there I thought I would post a little "reminder" of what GM is looking for. Not just before the BK, but including their scenario for tommorrow. You have an uphill battle to fight and if you can read between the lines you will realize it is NOT going to be easy. Not only is GM rated as "The worst Corporation to be a supplier for" but they are rapidly becoming the "the worst corporation to have as a supplier", especially for the smaller Dealers. So, before I go on to things that are a "little" more fun I will share this with you. PAY ATTENTION!!!!! It is quite true and best of luck to you all!
Cliff

GM DISTRIBUTION AND DEALERS
Proliferation has led to the presence of many more dealers than necessary, and certainly many more than most other car companies. Other impacts on dealers include:
o An increase in inventory (“floor plan”) and display costs
o A reduction in dealers’ net car margins, due to longer inventory holding times
o Difficulty for dealers in having the right GM car in stock for a particular potential buyer to inspect and test drive
o An increase in the costs of dealers’ parts inventory and handling, which reduces dealers’ net parts margins
o Greater complexity in dealer-vehicle service costs
o A significant increase in the likelihood of errors in dealers’ parts stores, which can affect service quality and vehicle quality
o None of the above dangerous and misleading corporate objectives will support market focus; some objectives can actually improve market focus, while reducing long-run net cash flow (for example, maximizing unit car sales)
o GM should downsize the number of divisional portfolios to two from five, to have any real hope of rebuilding market focus. Toyota has two divisions (Toyota and Lexus), as does Honda (Honda and Acura). The clear rationale for these market-focused strategies is to be able to compete in one division for low and medium-priced cars, and in another for high-priced cars.
o The autonomy and power of divisional managers to plan their own car portfolios has to be dramatically reduced, and coordinated by GM corporate portfolio management. One of the major factors driving GM’s loss of market focus and runaway portfolio has been the unmonitored behavior of each GM division, which has acted as though it were a stand-alone carmaker, offering a full portfolio of cars across many different market segments, seemingly without regard for the strategies of other GM divisions.
o The first division of GM (Chevrolet/Buick Division) could be designated/re-positioned for low to medium priced cars, which would compete in segments 7 to 18.
o The second division of GM (Cadillac Division) could compete in the high priced segments of 1 to 6.
o Both the number of GM car brands and models should be dramatically reduced. In any market segment in Exhibit 2, there should be no more than two GM cars, and preferably only one.
o Cross-brand and cross-divisional vehicle rebadging and replication must stop. (Witness the Pontiac Solstice and Saturn Sky sports cars in Segment 12, and many other GM examples)
o There should be no price-band crossovers between the two divisions, or major brands within divisions. For example, the highest-priced Chevrolet must be cheaper than the lowest priced Buick. The highest-priced Buick must be cheaper than the lowest-priced Cadillac.
o The number of car dealers has to be dramatically reduced and clearly defined as Chevrolet /Buick dealers or Cadillac dealers.
o The number of vehicle assembly plants should be reduced and reorganized around the two divisions
o The number of mechanical option and the choices and variations in brand and model engines and transmissions have to be dramatically reduced. For example, one automatic transmission design should be enough to service all of Chevrolet/ Buick division and maybe even Cadillac. Chevrolet/ Buick division does not need more than two or three engine choices
o The number of outsourced parts suppliers has to be dramatically reduced to bring costs and quality under control.

[Richard]

Toyota has 3 in the US (Scion, Toyota, Lexus)
Nissan also has 2, (Nissan and Infiniti) and was comtemplating a 3rd for entry level.

It still gauls me to no end that during the BK, that the car czar didn't force GM to drop Chevy Trucks, and have one single brand of truck GMC. Instead the spend millions each year to market and tool 2 truck lines to compete against each other.

The only reason Buick was kept (instead of Pontiac) was because of the China market. The last 2 years of the Pontiac brand, it outsold every division except Chevy. Buick is a thorn in GM's side. Every single vehicle in their portfolio is a rebadged Chevy - with the introduction of the Trax, the only exclusive vehicle they had (Encore) is now a clone.

[possum]

Cliff, I believe every word of it. Much of it I actually agree with, if GM is to survive. Unfortunately it will be painful for all of us in these stores, especially Buick-GMC. The Big-Box Chevy stores will soon be the only ones left, because their Dealer Council has the loudest voice. That's why Pontiac is gone, popular or not they were outnumbered. I don't even know why Buick exists, they could just come up with an "Ultra" or some high level trim on the Chevys and be done with it. GMC is next, unless they follow my plan and make ALL the SUV's exclusive to Buick-GMC, and leave the trucks to Chevy. Or vice-versa, as Richard suggested and leave all the truck business to GMC. Either way will never happen for the same reasons, (see above).

But you're a short-timer and I have 20 years left (sad state of the business, been in it for 27+ already) so enjoy the fruits of your labors. We will continue to muddle through, and maybe a "consulting" job will present itself...

ps. The stand-alone Mom & Pop places are doomed.

[CMayne]

Keep in mind the GM "Golden Rule" when it come to all of you being a "business partner" with GM.


"GM reserves the right to amend or revise any program at any time based on its sole business judgment. Final decisions in all matters relative to the interpretation of any rule or phase of this activity rest solely with GM."

[PartsPlant81]

Damn. Feeling a lot better about my owner acquiring a Chevy dealer this week! Albeit another small dealership but at least we will have access to the Chevrolet brand now...

[2longinparts]

Go ahead GM and shoot yourself in the foot, again and thin out some more dealerships. That will get all your recalls done alot faster.

[CMayne]

Go ahead GM and shoot yourself in the foot, again and thin out some more dealerships. That will get all your recalls done alot faster.

This go around will take a while. To be done by "attrition". The easiest way to drive out the "small" dealer is by reducing discounts and allowances and by offering BIG savings to the "mega" dealers both in parts and vehicles. All of you "Tier 2, 3 , 4 and up Dealers will be the ones holding the bag. Then you can watch GM milk everything they can out of fewer Dealers. If the big dogs think they are safe then I am sorry to say it's only because they have not killed all the small dogs yet. Funny thing about greed, once you get away with it, usually you are too dumb to stop. Watch the way the wind blows!!!
I'll leave the light on for ya.

[Denise Trimble]

"Finding new roads" to nowhere.................