new policy

[sallen1]

Didn't watch the broadcast but there's a letter sent to GM dealers and it's posted on GM-dealerworld.

Basically, Service Plus and some of the other marketing schemes are done as of 1/2003. Everyone will be able to offer the 'life time garranty' if you sign a form acknowleging the rules and responsibilities (read it very carefully and understand what you are getting into). Also, no annual fees for the service!

Discounts will be increased for some stuff (the 20% number includes advertising co-op and other things that aren't really dicounts) and SPO says they'll advertise more AND create an SPO-LMG. That will be an interesting group, indeed.

IMO, this is starting to make sence: SPO needs to streamline their system. There are too many different programs that must be a headache and expensive to manage.

They need to get quality parts through the distribution process on time. It is still cheaper and faster to use a WD even though the local PDC is closer.

[mbowers]

Hewre's the GMSPO letter, courtesy of Scott Allen:

July 18, 2002

Dear GM Dealer,

A lot has happened in our shared business since the letter I sent to you in March. I've enjoyed the chance to reconnect and meet many of you, and appreciate your candor about what's working well with SPO and where we need to improve. Much of your feedback has
focused on the policy changes we announcedin April. I'd like to share my perspective on what we did, why and how we did it and what we have planned to strengthen relationships and drive quality growth and earnings for our respective businesses.

About three months ago, we announced adjustments in our terms and conditions along with more liberal return and scrapping policies and modified parts margins. These changes were made as a result of our ongoing process to benchmark ourselves against our OEM competitors. After the adjustments were made, GM maintained its position as the OEM with the best service and the highest discount levels. We are proud of SPO's reputation for providing industry-leading service to our dealers. GM was the first to offer daily order/daily delivery service. And since that time, we've invested hundreds of millions of dollars in lean warehouses and supply chain management to improve our level of service to you. We do not intend to lose our industry leadership position or the process that has taken us to the top.

GM consistently ranks first or second in terms of inventory management, order fulfillment, dedicated delivery service,
transportation, economics, returns, and promotions. These high marks come from listening to your concerns and ideas, and
responding to them. Since 1999, GM Parts and GM Service Operations have worked closely with the Dealer Fixed Operations Advisory Board (DFOAB) to identify a number of areas to improve our level of service. Such initiatives as making cross-line warranty
available to GM vehicle owners in emergency situations, allowing dealers to return all parts (except hazardous materials), and basing the distribution of essential tools on a dealers size and usage were driven by DFOAB recommendations.

For the balance of this year and beyond, GM Parts will dedicate considerable resources to help grow your customer pay business. We're working closely with the DFOAB to review alternatives to positively impact your bottom line. Some recently announced
initiatives include the launch of the Goodwrench credit card which provides a 90 days same as cash benefit for your service and parts customers, the real deal Summer sales promotion, and the GM Parts Summit Sales contest.

To build on these initiatives, Im extremely pleased to announce that effective tomorrow, July 19, 2002 through the end of the year, the standard order discount on all Goodwrench Service Merchandising Parts (GSMP) will be increased by 3.25 percentage points. Combined with available Return Reserve, Co-op Advertising and Customer Focus Incentive (CFI) allowances this will allow dealers to earn a maximum of 20 percent on all their GSMP purchases.

Further, we are evaluating the entire GSMP program with the intent of ensuring the parts included will significantly enhance dealers' ability to grow their customer pay business. Look for details in the November-December timeframe.

In addition to these programs, weve been looking strategically at our business and how best to leverage the Goodwrench brand equity across all GM dealers. Effective January 1,2003 we will return Goodwrench to an all-inclusive dealer program and establish it as the key service brand for all General Motors dealers.

This is great news for everyone. Not only will you see Goodwrench back on national TV as soon as the third quarter of this year, but the GM Goodwrench brand will be advertised at industry-leading level throughout 2003. We will more than double our current media budget. We will also be strongly supporting the development and
launch of GM Goodwrench Local Marketing Groups (LMGs) nationwide, helping dealers drive local service traffic. In addition, you
can now use some of your LMG Co-op Plus funds in conjunction with the current GM Parts Co-op program to support your local service and parts advertising.

It is in the best interest of both dealers and GM to have the right part in the right place at the right time. One of our key programs to help manage this situation has been the development of the Recommended Stocking Guide (RSG). The RSG guidelines have
been revised and improved significantly over the past few years and we're preparing for another major improvement. Effective in the first quarter of 2003 parts that are removed from the RSG will be returnable without utilizing your Return Reserve. Details on
implementation will be provided by calendar year end.

Additional detail on the GSMP discount can be found in GM Parts Bulletin IB#02-210 dated July 26, 2002. The attachment following
this letter provides background on the changes planned for the new GM Goodwrench and current GM Goodwrench Service Plus
Programs. Duane Miller and I are looking forward to speaking with you about these changes at the upcoming Regional Dealer Business Conferences.

As I mentioned in my previous letter, it's great to be back with such a terrific team. GM's success would not be possible without our partnership and commitment from you and the entire GM Dealer body. Be assured that GM Service and Parts Operations is aggressively pursuing strategies that will help us both win in the marketplace, today and in the future. I'm eager to work with you,and look forward to seeing you in the coming months.

Best Regards,



Doug Herberger

GMNA Vice President
SPO General Manager

[whatsis]

"Highest discount levels and best service?"
"Industry leaders?" "OEM with the best .....?" "Consistently ranks first or second.....?" Which division of GM is this referring to? Not the GMSPO that I have to deal with. Where did they invent these rankings from? Or is this another one of those "best in class" deals where the class is so qualified and limited that they are the only ones in it? Between this letter and the previous "impact worksheet" that showed how much each dealer would benefit by the increases in list price (what do you mean that you don't sell every part at list price?), GMSPO's credibility continues to backslide. They had truly better get their act together before they go making claims such as "best" and "industry leader". The only thing GMSPO is an "industry leader" at lately is making it tougher to do business with them and with our customers.

[sallen1]

A follow up...

GMSPO is trying to improve customer pay business at our dealerships and I like that strategy. If it wasn't for the service business in the mid-90's we'd be finished. Now cars and trucks sell and a busy service department keeps the cycle turning.

GMSPO needs 'industry leader' vision or nothing will get done: They have to start somewhere.

I've always suggested to our reps that SPO needs to be competitive (on price) with AC-Delco, etc. if they want us to buy more on stockorder. Now they are getting close. Can they compete on delivery? No, but then again, AC-Delco doesn't always have everything either.

I have seen improved quality in the people at SPO, especially our direct contacts and at the region. They've been responsive to critical issues and we've been careful not to make everything an emergency.

This is a merchandising program which should help everyone.

Wouldn't you want more service customers?

[PLOWBOY]

GM NEEDS TO DO SOMETHING TO HELP US,AFTER SLASHING DISCOUNTS & INCENTIVES,ENCOURAGING ACDELCO TO GO AFTER INDEPENDANT REPAIR SHOPS,IT SEEMS TO ME THIER LONG TERM GOAL IS TO COMPANY OWNED STORES!