Killing Caddy dealer makes little sense
12-14-2009, 10:28 AM
#31
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Location: Albany, NY
Posts: 10,287
Here is a story just as dumb, GM closed the only Chevy dealer in Schenectady county in NY. 146,555 people there and it isn't like there is another dealer just a few miles away.
Last edited by Z28x; 12-15-2009 at 07:47 AM.
12-14-2009, 10:59 AM
#32
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Join Date: Mar 2000
Location: St. Louis, MO
Posts: 163
There is now not a single Caddy dealer in Western MA (there were 3, as the article references above), and only ONE in the entire state of VT...and its near the Canadian border.
If you've somehow conned someone to now open a 'new and shiney' 5 million dollar dealership to replace what's in this area that is truley awesome and I will give you credit for that!
But as another person stated I find it hard to believe many people are going to want to put that much investment in to a dealership after watching a bunch of dealers just get screwed out of their life's work. Again if you managed to get someone to go along with this great! How about setting up an internet information disemination department so we don't have to to speculate.
.....but let's look at the market.
Dealer A may not be penetrating HIS market -- he may be selling 500 cars and trucks - and only have 12 percent of the market -- Dealer C may be selling all of his cars and trucks into Dealer B's area --
Dealer A may not be penetrating HIS market -- he may be selling 500 cars and trucks - and only have 12 percent of the market -- Dealer C may be selling all of his cars and trucks into Dealer B's area --
The discrepency comes from the area's where you only have one place.
(what line of work are you in, by the way?)
Then after that a supplier for saturn.
Today I am doing IT so hey to be fair lets pick on me and see how I do at my job and if did it good/bad. I mean I wouldn't listen to me if I didn't practice what I preach.
I work for an agent for unigroup/united van lines
We are one of ~400 agencys(think of us as 1 dealership of hundreds)
Of that 400 we are rated monthly in the top 5. That's top 1%.
So since you can't see the day to day inner workings of my company lets talk about what you can easily see and what I am soley responsible for.
When you go to a search engine and type in moving companies the market is flooded and good luck showing up on the first page. For my company we are in st louis. So a very generic search here would be 'st louis movers.' There are HUNDREDS of results. There's are big marketing agencies out there that will promise you an add campaign to try and get you on the first page. You can spend thousands having 'professionals' build you a site google likes and thousands more promoting it. Everyday I have these companies call me offering their services. I even had our #1 cross town rival pay for such things and tell us he couldn't understand how he spent so much and still we rank higher in search results.
I have never outsouced anything. I have never used a marketing company, I have never paid anyone to build my site. I have never paid to promote my site. I have never had any help. I'm not expert builder but I learned enough to do it. I have soley done everything myself. I have no inside knowledge of google and yet if you type in 'st louis movers' as a google search we are the number 1 result in a very saturated field of much larger compaines with a lot more recognizable names.
I know this doesn't have anything to do with the auto industry but you asked what I do and this is the easiest 'proof' I can show you that I practice what I preach and don't take 'we can't do that' for an answer. Google results probably don't mean much to you, but go ask your IT people what the odds are of getting a little no name company in a saturated field as the #1 result spending ZERO money. They will tell you it's impossible.
When I do my job I do it to be the best. I didn't listen to anyone tell me I couldn't do it.
Yes - it's easy to say "what a bunch of morons" - -except that you'd be wrong......yes, bad decisions - but it's easy to say that without all of the information.
From there expand it to the Ford forums, they complain about Ford like we do GM.
Can you imagine. "Hi I'm from GM and report directly to ____, if Ford won't build you the truck you want, tell us what you'd like to see and GM will, because GM cares more about you then Ford"
My original point was along the lines of "please say something nice now and then" -- no - you don't have to - and I suspect you won't --
You make the best damn powertrains out there and have so for 20 years.
The LSx engine's are phenomanal, the performance can't be beat.
You make more cool standoutish cars then anyone, unlike the boring don't notice me basic transportation eggs a lot of others make.
Someone there is amazing for pushing through the unique edition cars like the GNX, 89tta, SLP cars, lt4 SS and GS even though they are against insurmountable odds and people fighting them all the way
Feel better?
Last edited by Aaron91RS; 12-14-2009 at 11:09 AM.
12-14-2009, 11:47 AM
#33
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Join Date: Jul 2001
Location: FL/MI
Posts: 1,808
Speaking in generalities, please consider that enforcing rules, parameters, or policies, demands equal application.
I have no knowledge about the specifics being discussed.
I do know about the dangers of altering application of rules, policies, and parameters.
Doing so could, and likely would, undercut and collapse any kind of reset of what is expected from a franchisee if making exceptions for expediency's sake is entertained.
Getting a fresh start can be going back to square one. Open windows are pretty rare in some situations. You might see the wisdom of going all the way through the open widow, even if it costs you in the short run.
Last edited by 1fastdog; 12-14-2009 at 11:51 AM.
12-14-2009, 12:02 PM
#34
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Join Date: Mar 2001
Location: Sarasota FL
Posts: 3,375
To sidestep some of the larger "discussions" being had here at the moment, I'd like to ask one question of 1fastdog and Scott...maybe they can shed some light, maybe they cannot...
What money does General Motors save by closing a dealership? I know with Chrysler, I pay for my tech's trainings...I pay for my signs...I pay for my tools...hell, I even pay for all my own brochures...
If I was one of the chosen ones who got axed, what would Chrysler have saved by axing me? I'm not saying everyone that is getting shut down should be re-opened...the 1 aforementioned nearby Chrysler dealer that died under the program NEEDED to go away. He was terrible. But there are some good GM dealers getting the boot...dealers with strong CSI scores, decent buildings, but less-than-stellar sales because of the painfully obvious....
Soooo...what money does GM save getting rid of them?
What money does General Motors save by closing a dealership? I know with Chrysler, I pay for my tech's trainings...I pay for my signs...I pay for my tools...hell, I even pay for all my own brochures...
If I was one of the chosen ones who got axed, what would Chrysler have saved by axing me? I'm not saying everyone that is getting shut down should be re-opened...the 1 aforementioned nearby Chrysler dealer that died under the program NEEDED to go away. He was terrible. But there are some good GM dealers getting the boot...dealers with strong CSI scores, decent buildings, but less-than-stellar sales because of the painfully obvious....
Soooo...what money does GM save getting rid of them?
12-14-2009, 10:39 PM
#36
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Join Date: Sep 2004
Location: Mack and Bewick
Posts: 1,600
But as another person stated I find it hard to believe many people are going to want to put that much investment in to a dealership after watching a bunch of dealers just get screwed out of their life's work. Again if you managed to get someone to go along with this great! How about setting up an internet information disemination department so we don't have to to speculate.
If there is money to be made there will always be someone willing to make it. There will not always be free reign to thin the heard.
When they were slow and steady we said they were too slow. Now that they're moving fast we say they're too fast.
12-14-2009, 11:10 PM
#37
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Join Date: Apr 2001
Location: USA
Posts: 3,698
Here, the closest Cadillac dealer is 45mins away and paired with a Chevy dealer who sells Hyundai's at the other end of the lot. That being said, one factor not mentioned here is that Cadillac has not had a "full" product lineup in a while. The CTS and it's success seems to cast a fake glitter on the rest of Cadillac not so great lineup. When you look at at a brand like BMW, Lexus, or Mercedes...any car those brands makes has the potential of being the best in it's class when released. Outside CTS, Cadillac has not shown that (and calling CTS best in class is a strech).
In 2008 for instance, their lineup consided of-
CTS
STS
SRX (bascially CTS wagon)
DTS
XLR
Escalade and it's versions
Outside of the CTS, none of those cars were really "competitive" in their classes, and the Escalade has started to loose it's shine. If you go to Lexus's website, the type of vehicles Cadillac was missing is very obvious. They don't have an ES competitor because that is Buick. They don't have an IS sized car, though that may be fixed with Alpha. The didn't have an RX competitor (now been fixed by the SRX). Any sales the DTS had was fake hearse fleet volume. I am not sure why the STS missed the spot, but it has. The XLR-V cost as much as a ZR1, but was slower than a base Corvette. I always said if GM was serious about Cadillac they would have given it a supercar like the ZR1.
Basically what I am saying is...you may have too many dealers...but having product that is largely not competitive is a major issue also. My guess is that a Cadillac dealer selling 150 units a month in 2008, would do much better with the SRX now online.
In 2008 for instance, their lineup consided of-
CTS
STS
SRX (bascially CTS wagon)
DTS
XLR
Escalade and it's versions
Outside of the CTS, none of those cars were really "competitive" in their classes, and the Escalade has started to loose it's shine. If you go to Lexus's website, the type of vehicles Cadillac was missing is very obvious. They don't have an ES competitor because that is Buick. They don't have an IS sized car, though that may be fixed with Alpha. The didn't have an RX competitor (now been fixed by the SRX). Any sales the DTS had was fake hearse fleet volume. I am not sure why the STS missed the spot, but it has. The XLR-V cost as much as a ZR1, but was slower than a base Corvette. I always said if GM was serious about Cadillac they would have given it a supercar like the ZR1.
Basically what I am saying is...you may have too many dealers...but having product that is largely not competitive is a major issue also. My guess is that a Cadillac dealer selling 150 units a month in 2008, would do much better with the SRX now online.
12-15-2009, 07:18 AM
#38
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Join Date: Jun 2001
Location: Pewee Valley, KY
Posts: 4,600
It seems like GM should begin offering the Hummer dealers Caddy franchises, if there aren't other Caddy dealers to close. Unique facilities, high end appearance, ease of doing unique service options.
I don't know if that would work with GM selling Hummer off but maybe.
I don't know if that would work with GM selling Hummer off but maybe.
12-16-2009, 10:29 PM
#39
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Join Date: Nov 2001
Location: NC
Posts: 632
I understand the need to eliminate Cadillac dealers. Hard numbers don't lie.
But I'd be lying if I said the number of Cadillac dealers eliminated really doesn't worry me (roughly 1000 of the roughly 1500 if I recall correctly) I'd like to think that GM's plethora of dealers were somewhat of an advantage in a number of scenarios and it scares me that other brands might be more readily available and desirable given GM and Cadillac's current predicament.
If GM wants Cadillac to be taken seriously, then it is going to have to OVER deliver on every aspect. The product has to be there (which it has been, increasingly) AND the 'experience' has to be there. A lot of brands have built major loyalty based on the 'experience' of owning the car or belonging to the group. (THINK: Saturn, Lexus and most recently Mini and Scion)
So, why not a compromise? GM needs to do one of two things IMO. Either HEAVILY market to the alienated consumer that 1) he/she can shop for a Cadillac through a virtual showroom and 2) If need be, he/she can service the car at ANY GM dealer (something we know, but a lot of people surprisingly still don't) -OR- Allow the customer to shop online for the Cadillac he/she desires and have a delivery system in place for test driving or buying the car. Think about it; Joe Public could test drive/purchase online and within 1-2 days either pick the car up at his most convenient GM dealer or have it delivered to his house.
The "less than luxury" dealer experience probably wouldn't matter that much to someone if 1) It saves them a 2 hour trip and the hassle of car shopping 2) It seems customized to their desire and 3) They're not that discriminating in the first place because they're used to less elaborate 'small town' dealers.
However, that's not an excuse for a crappy dealership. I think it is important that GM continue to elevate the dealership experience in ALL of it's showrooms.
But I'd be lying if I said the number of Cadillac dealers eliminated really doesn't worry me (roughly 1000 of the roughly 1500 if I recall correctly) I'd like to think that GM's plethora of dealers were somewhat of an advantage in a number of scenarios and it scares me that other brands might be more readily available and desirable given GM and Cadillac's current predicament.
If GM wants Cadillac to be taken seriously, then it is going to have to OVER deliver on every aspect. The product has to be there (which it has been, increasingly) AND the 'experience' has to be there. A lot of brands have built major loyalty based on the 'experience' of owning the car or belonging to the group. (THINK: Saturn, Lexus and most recently Mini and Scion)
So, why not a compromise? GM needs to do one of two things IMO. Either HEAVILY market to the alienated consumer that 1) he/she can shop for a Cadillac through a virtual showroom and 2) If need be, he/she can service the car at ANY GM dealer (something we know, but a lot of people surprisingly still don't) -OR- Allow the customer to shop online for the Cadillac he/she desires and have a delivery system in place for test driving or buying the car. Think about it; Joe Public could test drive/purchase online and within 1-2 days either pick the car up at his most convenient GM dealer or have it delivered to his house.
The "less than luxury" dealer experience probably wouldn't matter that much to someone if 1) It saves them a 2 hour trip and the hassle of car shopping 2) It seems customized to their desire and 3) They're not that discriminating in the first place because they're used to less elaborate 'small town' dealers.
However, that's not an excuse for a crappy dealership. I think it is important that GM continue to elevate the dealership experience in ALL of it's showrooms.
Last edited by FUTURE_OF_GM; 12-16-2009 at 10:32 PM.
12-20-2009, 11:39 PM
#40
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Join Date: Mar 2000
Location: Detroit, MI USA
Posts: 2,301
So assuming what the first poster says your research has concluded people don't buy cars in two states?
If you've somehow conned someone to now open a 'new and shiney' 5 million dollar dealership to replace what's in this area that is truley awesome and I will give you credit for that!
But as another person stated I find it hard to believe many people are going to want to put that much investment in to a dealership after watching a bunch of dealers just get screwed out of their life's work. Again if you managed to get someone to go along with this great! How about setting up an internet information disemination department so we don't have to to speculate.
we are agreeing here were you have much saturation yes get rid of the overlap.
The discrepency comes from the area's where you only have one place.
In the past I've worked for a supplier for chrysler right down the road from the fenton/STL plant.
Then after that a supplier for saturn.
Today I am doing IT so hey to be fair lets pick on me and see how I do at my job and if did it good/bad. I mean I wouldn't listen to me if I didn't practice what I preach.
I work for an agent for unigroup/united van lines
We are one of ~400 agencys(think of us as 1 dealership of hundreds)
Of that 400 we are rated monthly in the top 5. That's top 1%.
So since you can't see the day to day inner workings of my company lets talk about what you can easily see and what I am soley responsible for.
When you go to a search engine and type in moving companies the market is flooded and good luck showing up on the first page. For my company we are in st louis. So a very generic search here would be 'st louis movers.' There are HUNDREDS of results. There's are big marketing agencies out there that will promise you an add campaign to try and get you on the first page. You can spend thousands having 'professionals' build you a site google likes and thousands more promoting it. Everyday I have these companies call me offering their services. I even had our #1 cross town rival pay for such things and tell us he couldn't understand how he spent so much and still we rank higher in search results.
I have never outsouced anything. I have never used a marketing company, I have never paid anyone to build my site. I have never paid to promote my site. I have never had any help. I'm not expert builder but I learned enough to do it. I have soley done everything myself. I have no inside knowledge of google and yet if you type in 'st louis movers' as a google search we are the number 1 result in a very saturated field of much larger compaines with a lot more recognizable names.
I know this doesn't have anything to do with the auto industry but you asked what I do and this is the easiest 'proof' I can show you that I practice what I preach and don't take 'we can't do that' for an answer. Google results probably don't mean much to you, but go ask your IT people what the odds are of getting a little no name company in a saturated field as the #1 result spending ZERO money. They will tell you it's impossible.
When I do my job I do it to be the best. I didn't listen to anyone tell me I couldn't do it.
Still waiting for any car company to get on the forums as a part of a corporate department to give us this 1 on 1 so we don't have to speculate with minimal information.
From there expand it to the Ford forums, they complain about Ford like we do GM.
Can you imagine. "Hi I'm from GM and report directly to ____, if Ford won't build you the truck you want, tell us what you'd like to see and GM will, because GM cares more about you then Ford"
It's not my nature to dwell on the present, but I'll try.
You make the best damn powertrains out there and have so for 20 years.
The LSx engine's are phenomanal, the performance can't be beat.
You make more cool standoutish cars then anyone, unlike the boring don't notice me basic transportation eggs a lot of others make.
Someone there is amazing for pushing through the unique edition cars like the GNX, 89tta, SLP cars, lt4 SS and GS even though they are against insurmountable odds and people fighting them all the way
Feel better?
If you've somehow conned someone to now open a 'new and shiney' 5 million dollar dealership to replace what's in this area that is truley awesome and I will give you credit for that!
But as another person stated I find it hard to believe many people are going to want to put that much investment in to a dealership after watching a bunch of dealers just get screwed out of their life's work. Again if you managed to get someone to go along with this great! How about setting up an internet information disemination department so we don't have to to speculate.
we are agreeing here were you have much saturation yes get rid of the overlap.
The discrepency comes from the area's where you only have one place.
In the past I've worked for a supplier for chrysler right down the road from the fenton/STL plant.
Then after that a supplier for saturn.
Today I am doing IT so hey to be fair lets pick on me and see how I do at my job and if did it good/bad. I mean I wouldn't listen to me if I didn't practice what I preach.
I work for an agent for unigroup/united van lines
We are one of ~400 agencys(think of us as 1 dealership of hundreds)
Of that 400 we are rated monthly in the top 5. That's top 1%.
So since you can't see the day to day inner workings of my company lets talk about what you can easily see and what I am soley responsible for.
When you go to a search engine and type in moving companies the market is flooded and good luck showing up on the first page. For my company we are in st louis. So a very generic search here would be 'st louis movers.' There are HUNDREDS of results. There's are big marketing agencies out there that will promise you an add campaign to try and get you on the first page. You can spend thousands having 'professionals' build you a site google likes and thousands more promoting it. Everyday I have these companies call me offering their services. I even had our #1 cross town rival pay for such things and tell us he couldn't understand how he spent so much and still we rank higher in search results.
I have never outsouced anything. I have never used a marketing company, I have never paid anyone to build my site. I have never paid to promote my site. I have never had any help. I'm not expert builder but I learned enough to do it. I have soley done everything myself. I have no inside knowledge of google and yet if you type in 'st louis movers' as a google search we are the number 1 result in a very saturated field of much larger compaines with a lot more recognizable names.
I know this doesn't have anything to do with the auto industry but you asked what I do and this is the easiest 'proof' I can show you that I practice what I preach and don't take 'we can't do that' for an answer. Google results probably don't mean much to you, but go ask your IT people what the odds are of getting a little no name company in a saturated field as the #1 result spending ZERO money. They will tell you it's impossible.
When I do my job I do it to be the best. I didn't listen to anyone tell me I couldn't do it.
Still waiting for any car company to get on the forums as a part of a corporate department to give us this 1 on 1 so we don't have to speculate with minimal information.
From there expand it to the Ford forums, they complain about Ford like we do GM.
Can you imagine. "Hi I'm from GM and report directly to ____, if Ford won't build you the truck you want, tell us what you'd like to see and GM will, because GM cares more about you then Ford"
It's not my nature to dwell on the present, but I'll try.
You make the best damn powertrains out there and have so for 20 years.
The LSx engine's are phenomanal, the performance can't be beat.
You make more cool standoutish cars then anyone, unlike the boring don't notice me basic transportation eggs a lot of others make.
Someone there is amazing for pushing through the unique edition cars like the GNX, 89tta, SLP cars, lt4 SS and GS even though they are against insurmountable odds and people fighting them all the way
Feel better?
And my point is this: You do I.T. - I don't - -so I'm not going to 'bash' people in I.T. when my computer melts down or the network goes down -- because I'm not an expert in it.
IF you are an expert in the Automobile industry - then perhaps you need to apply for a job at one of the major manufacturers!
My whole point in "saying something nice" now and then is that this is (or was) a community......
......and it used to be a pleasure to exchange thoughts and ideas --
but we've lost that.
As to manufacturers putting people out on the websites to answer all of your questions and educate -- frankly, we're putting the people we have left to work designing, engineering and building great products......and when someone like 1fast dog or myself come on here and try to give you info. - we get a 'remark' from you......
Now -- as to designing, engineering, and building great products, are we where we need to be? Not by a long shot -- but we're getting there.
The question in my mind is: will that be a disappointment to some? I do believe that there will be those disappointed when we pay back every last penny borrowed from the government --
Last edited by Fbodfather; 12-20-2009 at 11:44 PM.
12-21-2009, 12:00 PM
#41
Registered User
Join Date: Mar 2000
Location: St. Louis, MO
Posts: 163
People producing any product eventually get in to groupthink mode. It's good to have someone sit outside the normal work flow to give another perspective.
The IT people might not realize something isn't working for the end user because they know the work around without even thinking.
IF you are an expert in the Automobile industry - then perhaps you need to apply for a job at one of the major manufacturers!
Due to a recent bailout those places don't exist anymore.
As for applying for anymore, what chance would I have. It's not like your doing much hiring and even if you were I don't fit in to the lemming old school people they go for. I'm not a follower that fades in to the background even in real life. I would **** off the status quo real quick.
......and it used to be a pleasure to exchange thoughts and ideas --
Therefore the only satisfaction I have is to sit here and try to predict what should be. On the rare occasion it happens to coincide with what someone in GM actually does I can see what the result is and feel vindicated that I had a good idea.
As to manufacturers putting people out on the websites to answer all of your questions and educate -- frankly, we're putting the people we have left to work designing, engineering and building great products......and when someone like 1fast dog or myself come on here and try to give you info. - we get a 'remark' from you......
I'm going to stick to the idea there needs to be a dept specific for this.
Look at any sponser on ls1tech.com. They don't just post a jpg of thier business ad and leave. They have sponsors on there always answering questions and explaining things.
Those guys get huge business out of it and a VERY loyal customer base. (to a fault of groupthink but that's beside the point)
Again it's just my idea and I know I can't make it happen. I just need it here in writing so someday when someone does it, I can either feel good about it or if it's a failure you can tell me you told me so.
Last edited by Aaron91RS; 12-21-2009 at 12:03 PM.
12-21-2009, 12:22 PM
#42
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Join Date: Nov 2000
Location: Chicagoland IL
Posts: 16,179
I'm glad Scott and Paul post here, and I always read their posts with interest, but I agree that it might be helpful if GM had people or a department dedicated to monitoring what goes on in hyperspace on enthusiast sites.
12-21-2009, 02:28 PM
#43
Registered User
Join Date: Dec 2002
Posts: 681
To sidestep some of the larger "discussions" being had here at the moment, I'd like to ask one question of 1fastdog and Scott...maybe they can shed some light, maybe they cannot...
What money does General Motors save by closing a dealership? I know with Chrysler, I pay for my tech's trainings...I pay for my signs...I pay for my tools...hell, I even pay for all my own brochures...
If I was one of the chosen ones who got axed, what would Chrysler have saved by axing me? I'm not saying everyone that is getting shut down should be re-opened...the 1 aforementioned nearby Chrysler dealer that died under the program NEEDED to go away. He was terrible. But there are some good GM dealers getting the boot...dealers with strong CSI scores, decent buildings, but less-than-stellar sales because of the painfully obvious....
Soooo...what money does GM save getting rid of them?
What money does General Motors save by closing a dealership? I know with Chrysler, I pay for my tech's trainings...I pay for my signs...I pay for my tools...hell, I even pay for all my own brochures...
If I was one of the chosen ones who got axed, what would Chrysler have saved by axing me? I'm not saying everyone that is getting shut down should be re-opened...the 1 aforementioned nearby Chrysler dealer that died under the program NEEDED to go away. He was terrible. But there are some good GM dealers getting the boot...dealers with strong CSI scores, decent buildings, but less-than-stellar sales because of the painfully obvious....
Soooo...what money does GM save getting rid of them?
12-21-2009, 02:34 PM
#44
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Join Date: Jul 2001
Location: FL/MI
Posts: 1,808
01-26-2010, 08:30 PM
#45
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Join Date: Dec 2002
Location: Charleston, WV
Posts: 1,505
Cadillac store plan in jeopardy
Arbitration could thwart GM focus on metro markets
Neil Roland
Automotive News -- January 25, 2010 - 12:01 am ET
WASHINGTON -- General Motors Co.'s apparent strategy to bring Cadillac's dealership network more in line with its foreign competitors could be undermined by the arbitration process.
If arbitrators rule in favor of many Cadillac dealerships, it would leave GM with far more small-town showrooms than it wants.
GM has been quietly pushing Cadillac sales in large metropolitan areas and shedding dealerships in less populated regions, dealer lawyers and consultants said.
Cadillac dealerships will file a disproportionate share of GM's arbitration claims because most were targeted for elimination as a result of their small-town location rather than their performance, dealer lawyers said.
As the midnight Jan. 25 filing deadline loomed for rejected dealerships, hundreds of Cadillac showrooms prepared to give notice of their intent to seek reinstatement, the lawyers said.
"It seems like the GM strategy has been to align Cadillac to look more like BMW, Mercedes-Benz or Lexus in terms of focusing dealerships on urban areas on the east and west coasts," said Scott Watkins, senior consultant at Anderson Economic Group in East Lansing, Mich.
Some rejected Cadillac dealerships have hired the consulting firm to testify during the arbitration process on the economic viability of their stores.
Watkins said he has spoken with eight rejected Cadillac dealerships that are current or potential Anderson clients.
GM said it wants to cut its Cadillac franchises by one-third -- from 1,422 on Jan. 1, 2009, to about 500 by the end of this year.
Those 922 Cadillac dealerships account for nearly half the 2,000 GM franchises marked for termination by October.
GM declined detailed comment about its Cadillac dealership strategy, its planned cuts or its expectations for arbitration.
GM told many rejected Cadillac dealerships this month that the main criterion they failed to meet was "networking viability and throughput issues," the lawyers said.
"It means GM wanted to sell more cars through fewer dealers," said Anthony Giardini, general counsel of the Committee to Restore Dealer Rights, a group that represents rejected dealerships.
"It has nothing to do with performance. GM is saying we just don't want to be in that market."
In contrast, most of GM's non-Cadillac dealerships were given performance-related criteria, such as "retail sales index" or "dealer performance score," as bases for their rejection, said lawyer Mike Charapp of McLean, Va.
Trying to get thinner
U.S. dealerships as of Jan. 1, 2009
BMW 338
Cadillac 1,422
Infiniti 181
Lexus 226
Mercedes-Benz 347
Source: Companies
Small-town excellence
One small-town Cadillac dealer, Charles Spadafora Jr. of Indiana, Pa., said his showroom ranked in the top 10 percent in the state according to GM's performance measures including sales, capital and customer satisfaction.
GM's termination of his franchise, as well as that of a neighboring Cadillac showroom, left the closest Cadillac dealership almost an hour's drive away, he said.
"A number of our customers told us they wouldn't buy another Cadillac because they didn't want to travel at least 45 minutes to get it serviced every time something goes wrong," Spadafora said.
Spadafora, 34, said the Cadillac dealership was started by his grandfather, Cecil, in 1947. When GM told him of his termination last year, Spadafora said his first thought was of his grandfather.
GM told Spadafora, who is filing for arbitration, that his criterion for rejection was "networking viability and throughput issues."
The Jan. 25 filing deadline was set in a law signed by President Barack Obama last month establishing arbitration for rejected GM and Chrysler Group dealerships.
More than 1,000 targeted showrooms out of a total of 2,789 are likely to seek arbitration, dealer lawyers estimate.
Binding arbitration decisions are due in June.
Rural advantage
"We are committed to participating in a professional, effective arbitration process for the dealers from each of our four brands that received complete or partial wind-down agreements and want to file for reinstatement under the federal legislation that is in place," GM spokeswoman Ryndee Carney said.
Some dealer lawyers contend GM would be helped by a restoration of eliminated Cadillac franchises.
Said Charapp: "The decision to have Cadillac abandon small-city and town markets where it dominated as a luxury brand to concentrate on large metros where it does not is the automotive equivalent of New Coke."
Neil Roland
Automotive News -- January 25, 2010 - 12:01 am ET
WASHINGTON -- General Motors Co.'s apparent strategy to bring Cadillac's dealership network more in line with its foreign competitors could be undermined by the arbitration process.
If arbitrators rule in favor of many Cadillac dealerships, it would leave GM with far more small-town showrooms than it wants.
GM has been quietly pushing Cadillac sales in large metropolitan areas and shedding dealerships in less populated regions, dealer lawyers and consultants said.
Cadillac dealerships will file a disproportionate share of GM's arbitration claims because most were targeted for elimination as a result of their small-town location rather than their performance, dealer lawyers said.
As the midnight Jan. 25 filing deadline loomed for rejected dealerships, hundreds of Cadillac showrooms prepared to give notice of their intent to seek reinstatement, the lawyers said.
"It seems like the GM strategy has been to align Cadillac to look more like BMW, Mercedes-Benz or Lexus in terms of focusing dealerships on urban areas on the east and west coasts," said Scott Watkins, senior consultant at Anderson Economic Group in East Lansing, Mich.
Some rejected Cadillac dealerships have hired the consulting firm to testify during the arbitration process on the economic viability of their stores.
Watkins said he has spoken with eight rejected Cadillac dealerships that are current or potential Anderson clients.
GM said it wants to cut its Cadillac franchises by one-third -- from 1,422 on Jan. 1, 2009, to about 500 by the end of this year.
Those 922 Cadillac dealerships account for nearly half the 2,000 GM franchises marked for termination by October.
GM declined detailed comment about its Cadillac dealership strategy, its planned cuts or its expectations for arbitration.
GM told many rejected Cadillac dealerships this month that the main criterion they failed to meet was "networking viability and throughput issues," the lawyers said.
"It means GM wanted to sell more cars through fewer dealers," said Anthony Giardini, general counsel of the Committee to Restore Dealer Rights, a group that represents rejected dealerships.
"It has nothing to do with performance. GM is saying we just don't want to be in that market."
In contrast, most of GM's non-Cadillac dealerships were given performance-related criteria, such as "retail sales index" or "dealer performance score," as bases for their rejection, said lawyer Mike Charapp of McLean, Va.
Trying to get thinner
U.S. dealerships as of Jan. 1, 2009
BMW 338
Cadillac 1,422
Infiniti 181
Lexus 226
Mercedes-Benz 347
Source: Companies
Small-town excellence
One small-town Cadillac dealer, Charles Spadafora Jr. of Indiana, Pa., said his showroom ranked in the top 10 percent in the state according to GM's performance measures including sales, capital and customer satisfaction.
GM's termination of his franchise, as well as that of a neighboring Cadillac showroom, left the closest Cadillac dealership almost an hour's drive away, he said.
"A number of our customers told us they wouldn't buy another Cadillac because they didn't want to travel at least 45 minutes to get it serviced every time something goes wrong," Spadafora said.
Spadafora, 34, said the Cadillac dealership was started by his grandfather, Cecil, in 1947. When GM told him of his termination last year, Spadafora said his first thought was of his grandfather.
GM told Spadafora, who is filing for arbitration, that his criterion for rejection was "networking viability and throughput issues."
The Jan. 25 filing deadline was set in a law signed by President Barack Obama last month establishing arbitration for rejected GM and Chrysler Group dealerships.
More than 1,000 targeted showrooms out of a total of 2,789 are likely to seek arbitration, dealer lawyers estimate.
Binding arbitration decisions are due in June.
Rural advantage
"We are committed to participating in a professional, effective arbitration process for the dealers from each of our four brands that received complete or partial wind-down agreements and want to file for reinstatement under the federal legislation that is in place," GM spokeswoman Ryndee Carney said.
Some dealer lawyers contend GM would be helped by a restoration of eliminated Cadillac franchises.
Said Charapp: "The decision to have Cadillac abandon small-city and town markets where it dominated as a luxury brand to concentrate on large metros where it does not is the automotive equivalent of New Coke."
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