Editorial: General Motors Zombie Watch 3: Dealer or No Dealer?

Robert Farago
by Robert Farago
editorial general motors zombie watch 3 dealer or no dealer

General Motors is at war with itself. Thanks to a staggering, though not unexpected, lack of decisiveness, GM’s management has managed to completely alienate its major, public-facing “stakeholder”: GM dealers. Without the guys on the sharp end moving the metal, General Motors might as well declare bankruptcy and surrender the keys to the executive washroom to a 25-member federal quango led by Washington insiders with no manufacturing experience whatsoever. Oh, wait. In fact, GM needs its dealers even more now that it’s a zombie than before, when it was also a zombie (but didn’t know it). And of all the items of GM CEO Fritz Henderson “to do” list, not throwing GM’s entire US dealer network into chaos should have been somewhere near the top. I want to say something about a “race to the bottom,” but I’ll let you connect those dots.

Last week, GM CEO Fritz Henderson faced a Spanish Inquisition from the company’s paymasters. Senator Rockefeller wanted GM’s former CFO to explain his rationale for cutting over 2000 dealers from the roster. Fair enough, right? If you’re going to unleash a political shitstorm by shit-canning a large, politically-connected, highly litigious, battle-tested, lyin’, cheatin’, boozing, whoring, testosterone-fueled group of GM “customers” (the dealers are the ones who actually buy the cars from GM), then you want to make sure you have your proverbial ducks in a row.

Oops! Fritz forgot his Ross Perot-ian “We’re In Deep Shit for Dummies” charts back at Days Inn. Or did he leave them on the plane? Rick friggin’ Wagoner just HAD to fly to D.C. in the Gulfstream to beg for bailout bucks, the bastard. Senator Rockefeller also wanted an actual list of dealers culled. Damn! I must be wearing a different jacket! Anyone remember the scene in Raiders of the Lost Ark, where Indy casually shoots the scimitar flailing baddie? GM’s the dope with the flashing steel.

THIS is how the new, “smarter” GM rolls? It gets worse. On the same day that Henderson failed to defend the company’s decision to downsize its dealer network, Fritz granted eleven axed dealers a reprieve—without revealing the exact methodology used to separate the wheat from the chaff. Yeah, that’s a good idea: play favorites. That’ll REALLY piss off the disappeared. And if that didn’t do it–which it did—GM’s crafted a new state-trumping franchise agreement for their remaining dealers that makes slavery seem like an oral contract.

According to Automotive News, New GM’s New Deal with its new dealers puts the “con” into “draconian.” To remain a part of “the family,” all GM stores must agree—in writing—to increase sales by 10 percent (maybe twenty), carry larger inventories, eliminate non-GM brands from their showrooms, upgrade dealerships, maintain high customer satisfaction scores and STFU if a new GM store locates more than six miles away from their dealership.

In other words, GM’s new contract includes a “just shoot me now” tick box at the bottom.

Sell more vehicles? The fact that GM’s market share has been on a downwards trajectory since the last century (news flash: the company is now bankrupt) should tell the corporate mothership a little something about how easy it is to sell GM vehicles these days. Hang on; shouldn’t GM make better products before they “force” dealers to sell more cars?

By the same token, what’s with the dealership upgrades? GM stores are hurting for cash. Wait, let me guess. The feds are going to provide loans (or loan guarantees) so that GM dealers can put Ford, Toyota, Honda, Hyundai, etc. dealerships to shame. Because Uncle Sam believes that rewarding losers is really just “leveling the playing field,” and when it comes to debt, more is always better. Meanwhile, pay no attention to that $1 million per dealer HUMMER upgrade fiasco. That was then. This is crazy.

As for the mandate to “maintain” consumer satisfaction scores (a.k.a. CSI), it’s Big Mac time. They CANNOT be serious. GM’s CSI scores have been a complete sham since they were first foisted upon their retail operations. I’ve got two words for anyone who thinks otherwise: Bill Heard. And another two: blind eye.

If GM was actively trying to screw-up its future, they couldn’t do it more effectively than they are right now. Saying that, I have every confidence that GM will somehow find a way. Let Barney Frank fuck with your plant closing plans? Sure! Piss away resources on a new green car that can’t compete with Toyota’s last generation hybrid? To paraphrase Albert Einstein, “employing the same people to do different things is the definition of eternal insolvency.”

Meanwhile, remember Fritz Henderson’s pledge to We The People promising transparency as it “reinvents” itself to repay our hard-earned tax money? How’s this for opaque: dealers are prohibited from discussing the agreement with anyone other than employees or business partners without GM’s expressed written consent.

Dead automaker walking.

Join the conversation
2 of 27 comments
  • ZoomZoom ZoomZoom on Jun 09, 2009

    I like to scare the Toyota service guys. Keep's 'em on the straight and narrow. When they tell me that line about "if you get a survey in the mail, we hope that you check "excellent" for every catagory", or some such foo-fah, I tell them that I'll be satisfied when I leave here. If I find that the computer wasn't reset, the tires weren't rotated, the caps and plugs weren't re-installed, or if I discover "spare parts" (screws, brackets, trim pieces) in the car, I'll either be on the phone to the service manager or I'll be right back in his service driveway, and no matter how many cars are in front of me, I'm first in line. I usually get a head-nod in the affirmative. I go on to say, "Furthermore, I don't like junk mail and I don't like surveys, and that in fact even RECEIVING a survey in the mail will piss me off to no end; so please make sure I don't get one, because there's no telling what I'll do if I'm already in a bad mood!" And guess what, I haven't gotten a survey in the last two oil changes! P.S. What a terrible picture. Ten girls should have a lot more than 6 legs among them! I'm kidding, they're lovely.

  • Gmbuoy Gmbuoy on Jun 09, 2009

    Christian: BS, this site has been clamouring for the medicine for years and now people are bitching about the taste ? Give Fritz a break folks, it was a no win situation in front of the Senate panel, they hold the damn keys to the car now, and 11 dealerships got a reprieve is indicative of what ? That new GM is not perfect ? As someone who has put a survey under a dealers nose and asked him to explain why a customer feels the way they do about a miserable experience, those who feel it is b.s. I think are talking more about themselves then what is going on at GM. If a bad experience is had at a dealership there is the customer communication center, 1-800 in every phonebook. If a customer has been mangled by the dealer, those CCC people are mercilous fighting for what is right. Stonewall and try and let the customers situation slide ?, as a GM Rep, then someone is going to land on your boss with both feet and after that you may wonder why you got transfered to east of no where. Allegro Con Carni - It doesn't matter the score, we grade on the curve, Dealerships that are two standard deviations below the mean are given monthly proctology examines, which over time have the effect of either getting the worst habits fixed or the dealer admits he doesn't give a shit and then we can get to down to the business of convincing them to exit the business. Most often they fix it.

  • MRF 95 T-Bird In 1986 the Yugo was listed as $3990, which was the lowest priced car in America at the time. The base Hyundai Excel was listed at $1k more at $4995. I knew someone at the time who purchased a base Excel hatchback in red with a four speed. I think he added an aftermarket stereo. He was trading in a Renault Alliance that he purchased a few years earlier for about $5k.
  • SCE to AUX Good summary.I still think autonomous driving should be banned until some brave mfr claims Level 5 capability, and other distractions like games and videos should only be available for stationary vehicles.As for the A/C, I just turn a knob in my Hyundai EV.
  • MrIcky My bet is flood.
  • Lou_BC "A Stellantis employee recommended the change after they had a near-miss with an emergency vehicle they couldn’t hear."I was at a traffic light and the car next to me had the stereo cranked. My whole truck was vibrating. A firetruck was approaching lights and sirens. They should have seen it since it was approaching from their side. Light changed and they went. It was almost a full on broad-side. People are stupid. A green light at an intersection does not mean it is safe to go. You still have to look especially at a "fresh" green. Idiots run the light, an emergency vehicle is coming, or it's icy and vehicles can't stop.
  • Lou_BC My kids drove around in a 2 wheel drive Chevy Colorado crew cab I bought off a neighbour when they were moving to Alberta. We kept it 4 years but sold it recently due to various engine codes popping up and the engine sounding more tired. It was one of the inline 5's known to have soft valve seats. All I had to repair was new front brakes and rotors, a wheel bearing and a battery. Both kids wrecked a tire clipping a curb. My oldest backed into it with his pickup which required a grill and headlight replacement. We bought a 2008 Corolla as a replacement for my 19 year old. It came with 4 new summers and a set of decent winter tires on rims. We'll run that until it looks like it will implode/explode. My oldest currently has 3 Cherokees (2 for parts), an F150 "Jelly bean", and a Mercury Grand Marquis. Insurance is very expensive for young drivers. That's why beaters can save some money. I haven't put them on my new truck's insurance since that would add around 90 per month in costs. I'll add my oldest to it temporarily so he can use it to get his "full" driver's license.