By on June 17, 2009

Robert — If dealers do not sign the wind-down agreements, their sales and service agreement will not be renewed in 2010, and they will not be eligible for GM assistance. However, to date, we have 99% completion of these agreements.

–John McDonald
GM Spokesman
Detroit

However?

What choice do they have? You know . . . providing the anti-dealer cull bill ends-up unloved and unsigned on the president’s desk, as expected.

[This comment appeared underneath the post “Mark LaNeve’s Letter to New GM Dealers Re: The New Deal.” It is the first time (that I know of or can remember) a GM official has commented on a TTAC post. We welcome Mr. McDonald as a new member of our Best and Brightest. His decision to register and post entitles him to protection under our no-flaming policy: No flaming the website, its authors or fellow commentators. I sincerely hope that this terse statement marks the beginning of auto industry Glasnost, complete with free, open and honest engagement with “stakeholders” outside the corporate walls. I will not, however, hold my breath.]

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22 Comments on “GM Spokesman Defends Dealer Agreement on TTAC...”


  • avatar

    Congratulations to sticking your neck out, John.

  • avatar
    dwford

    Robert,

    I guess your recent TV appearances caught some attention. I would suggest that this forum is a better place for GM to get it’s message out than the Fastlane blog.

    Welcome, John.

  • avatar
    TonyJZX

    i don’t think he’s defending it per se

    the GM dealers have been given 1 yr to get their house in order

    at least it’s better than Chrysler and look how those discussions here ended

  • avatar
    mikey

    I don’t care if your cutting dealers,or employees,it can’t be done without pain.

    I’ve seen 200 jobs get axed in one day.GM lost some good people. At the same time a few assholes went out the door.The same holds true for the dealers.

    Cutting dealer’s and brands, and paychecks and pensions and benifits,rewriting union contracts,none of it is pleasant. Using taxpayers money to survive isn’t that popular either.

    The very survival of GM depends on some nasty measures being taken. If the “new GM” fails{some say it might} the dealers will be all gone. Pensions slashed {60% in my case}no benifits,NO JOBS no need for contracts, suppliers killed or wounded. Worst of all the taxpayers will never see any return on thier investment.

    I hate to see dealers close and good people out of work. Unfortunately its the price we must pay.

  • avatar
    Airhen

    Keep in mind that these days, any spokesman or PR person is bound to have a lawyer review any of their comments. So I doubt we’ll see anything that is earth-shattering under his name.

  • avatar
    EricTheOracle

    GM isn’t covering pitted and rusting chrome on a two year old Escalade either. I purchase four cars a year but after the nonsense I was just run through, GM will no longer ever be an option. Next car will be a Merc.

  • avatar
    Lokkii

    Thank you for coming to talk to us. Having played a junior version of the role you’re holding, at one time in my past, I certainly understand that there will be things that you can’t answer for us, either because the answer hasn’t been formally decided, formally announced, or shouldn’t be formally announced.

    We look forward to whatever you can share with us.

    I hope that will include some good news for the enthusiasts… Camaro convertible still alive? Perhaps a “240 Volt” Tesla fighter halo vehicle?

    I personally am more interested in the path to the future than the wreckage of the past, but there are some concerns there too. I have a friend who is a GM Master Mechanic for a dealership which has gotten TWO letters; the first letter a doom letter; the second a happier one. This suggests that the dealer cull is still a work in progress?

    Again, thank you.

  • avatar

    Thanks for the welcome, everyone. I am out there on a number of sites, blogs, Twitter, etc … and while I can’t always provide the answers people “want” … I will do my best. And, no, a lawyer isn’t standing behind me with a gun to my head.

    We’re trying to act differently, and taking some risk by engaging directly with people is the right thing to do … for my friends and neighbors that have a hard time with that I simply say, “Build a bridge and get over it.” It’s the right thing to do and we’re sincerely trying to do things better. We can’t insulate ourselves anymore.

    As far as the dealers are concerned … these are terribly painful times. These reductions hurt everyone on a personal level. This is not for the faint of heart, but as we get through this process, the customer and company will be better for it. The market — and our customers — demand it and we’ll only get one shot to do it right.

    I think what is difficult for many of us to understand is how we can be criticized for trying to address that which we have been critized for years of having … a “bloated brand and distribution structure.” It seems a lot of folks wanted to see us go out of business, yet when the local dealer closes, or a favorite brand is sold, people and politicians scream bloody murder. As I told a reporter friend of mine a few years ago … “You can’t beat us up for not having competitive incentives and then say we have to reduce our incentive spending to be more responsible to the bottom line. Pick one. We’re not Bi-Polar. We’re trying to be balanced in our approach.”

    We’re tough and we’ll get through this as the economy starts to recover and everyone can feel better about their job, their future and their children’s future. Having lost my job on two occasions before, I can personally relate to what dealers and employees are going through. I lost an airline pension to bankruptcy (twice) and have been shuffled out when the company didn’t have enough business to support me. There are others here at GM who can relate.

    So, let’s keep the dialogue going and I appreciate everyone engaging. I know there are some out there who will believe I’m just a shill or mouthpiece. That’s fine. What I am is one of the many personal faces of GM with skin in the game. And, by the way, a taxpayer with a huge investment.

    –John McDonald
    GM Spokesman
    Detroit

  • avatar
    John Horner

    What I would love to see is the list of executed dealers and the actual criteria which was used to judge them with.

  • avatar
    jamie1

    John,

    What a highly intelligent and articulate commentary piece – you are welcome indeed.

    As a fellow member of the Communications community (albeit from the other side in the Dearborn area) your participation and frankness is appreciated. I have been a member of this site for a number of years and have always enjoyed the banter and dialogue even if at times, I, like you, can get frustrated at being berated for our position on certain issues. I guess this is the right people have to express themselves freely on the site without risk of flaming etc.
    Best wishes to you and the team at GM and we look forward to further intelligent discussion in the future.
    Kind regards,
    Jay Ward
    Ford Communications
    Dearborn

  • avatar

    Do either you John or you Jay have this info. How many dealers did GM and Ford have in the late 70’s early 80’s and how many do they have now?

  • avatar

    John — These are independent business people and if they want to make themselves known to the public — that’s their call, not ours. Making that known would have a direct impact on their ability to successfully wind-down their businesses and manage their own employee issues. I’m sure you respect that as much as we do. However, I’m fairly certain some dealers identities will become public in the course of the court disclosure and claims activity down the road.

    As far as the criteria we used to make the determinations, we’ve been very public and open with that. Key performance factors reviewed included, but are not limited to the following:

    • Minimum Sales Threshold (sales volume)
    • Sales Effectiveness Index
    • Customer Satisfaction Index
    • Working Capital
    • Profitability

    Other additional considerations may include: Dualing Patterns….including non-GM brands; Dealership Location; Facility (modern or outdated); Overall number of dealers in the market; Other market factors

    I hope that makes it a bit clearer. All the criteria and justification in the world doesn’t lessen the blow if you are on the receiving end. That’s why we’re offering wind-down assistance to those dealers who accept it so we can address their needs in this very difficult time.

    John McDonald
    GM Spokesman
    Detroit

  • avatar
    mikey

    @johneieio….Well said. There is thousands of us that have a massive stake in GM. Its a comfort to know that we have guys like you that can and will make it work.

    Michael
    GM Canada hourly retired

  • avatar

    Sherman — Not sure of the exact number, but believe it exceeded 10,000 … just for GM. We’re at about 6,000 now and shooting for something near 3,600 by the end of 2010 … that will still be nearly double the number Toyota currently has.

    And thanks for your best wishes, Jay. We’re all in this together!

    –John McDonald
    GM Spokesman
    Detroit

  • avatar
    jamie1

    I don’t have easy access to the 70’s and 80’s data but will see if I can find someone who does.
    In 1998, Ford had 4,986 dealers.
    In 2008, Ford had 3,787 dealers

  • avatar
    Lokkii

    I am is one of the many personal faces of GM with skin in the game…

    It seems a lot of folks wanted to see us go out of business, yet when the local dealer closes, or a favorite brand is sold, people and politicians scream bloody murder.

    One of the expressions we use for such situations in our policy arena matches up with what you’ve just described above.

    “It (the policy change) was a great idea until it grew a face”…

    We hear this kind of thing in the media all the time:

    ‘Mary Jo Kopeckne, widowed, orphaned mother of 14, lost her job at (GM) yesterday. “I don’t know how I’m going to make ends meet now”,she said, crying to our cameras.

    “Being an HIV-positive diabetic quadriplegic makes it so hard to find work” she said. The(GM) spokesperson contacted for this story said –
    (What the Hell CAN you say?)

    You have my sympathy.

  • avatar
    Johnny Canada

    “We’re all in this together”

    Any idea for how long?

  • avatar
    commando1

    Up until the cull, I distincty remember TBTB consistantly whining that the GM dealership was seriously bloated.

    What say you now?

    Damned if you do. Damned if you don’t.

  • avatar
    50merc

    Mr. McDonald, it’s great to have your contributions to the TTAC conversations.

    Interesting that in ten years the number of Ford dealerships dropped by a fourth.

    mikey: “Pensions slashed {60% in my case}” Holy crap! I didn’t know that CAW retirees already on pension got cut like that.

  • avatar
    frankrizzo

    I hope I’m not too late as I have a question for Mr. McDonald

    I live about 40 miles from a major city in the south. The only GM dealership left of 50+ years has signed the wind-down agreement. There is about is a 20 mile drive between my local dealer (who is closing) and the next closest GM dealer. Towns north of me have a 35+ mile radius to find a GM dealer.

    Sure the dealer was small, they were in an old (paid off, low overhead) building, but they had a decent reputation and were not even offered a chance to improve. They just got the axe.

    And to just to compare, we have a Ford, Nissan, Toyota and a Chrysler Jeep franchise located in my city. Who all are about the same distance from another like mfg. The same 20 miles.

    My question is, while I understand the cull has to happen, traveling 20 miles to get to the closest dealer for parts, warranty repair or just to look at what GM has to offer seems like a stretch.

    Thanks for your time and input…

    -Frank

  • avatar

    Frank — Thanks for the question.

    A few thoughts … every dealer has known for years where their performance stands and everyone had the opportunity to improve their profitability, capitalization, customer satisfaction and all the other metrics we’ve discussed. This isn’t a new idea. The brutal reality is that the market has shrunk more than 40 percent in less than a year and we can’t support them any longer. No one likes this, but it is the reality and we can’t hold a blind eye to it. Change can no longer be denied.

    After all the reductions are complete in 2010, we’ll still have more dealers in more areas than any other manufacturer — by a wide margin. For example, we’ll have nearly double the number Toyota currently has. I realize that is cold comfort if you are the one driving a few extra miles to get warranty work done.

    And don’t be surprised if the other manufacturers lean out their distribution networks too … everyone is facing the same market.

    Again, no one likes to have to deal with the issues we and our dealer partners are wrestling with these days … but we are doing it and we’ll see tomorrow as a result.

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